Title: Aliant Bank v. Carter

State: alabama

Issuer: Alabama Supreme Court

Document:

Rel: 12/31/2015
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, 2015-2016
____________________
1140023
____________________
Aliant Bank
v.
Kimberly Carter and Kerry Carter
Appeal from Shelby Circuit Court
(CV-14-901043)
PARKER, Justice.
Aliant Bank ("Aliant") appeals the entry of an injunction
against it by the Shelby Circuit Court ("the circuit court")
enjoining Aliant from interfering with a contract for the sale
of real property between Kimberly Carter and Kerry Carter, on
1140023
the one hand, and Gregory R. Nunley and Robyn C. Nunley, on
the other.
Facts and Procedural History
The Carters own, as joint tenants, a piece of real
property located in Shelby County ("the property").  The
Carters used the property to secure a mortgage from Mortgage
Electronic 
Registration 
Systems, 
Inc. 
("MERS"); 
the
approximate payoff amount of the mortgage during the time
relevant to this appeal was $372,277.93.  In addition to the
MERS 
mortgage, 
three 
creditors 
secured 
judgments 
against 
Kerry
Carter in the total approximate amount of $1.5 million.  In
order to secure their judgments against Kerry Carter, the
judgment creditors obtained liens against the property in the
amounts of $287,244.36, $980,088.41, and $245,575.42 on the
dates of December 15, 2010, April 7, 2011, and April 26, 2011,
respectively.  In 2011, Aliant obtained a judgment against
Kerry Carter in the amount of $789,738.08.  On or about
November 28, 2011, Aliant recorded its judgment against Kerry
Carter in the Shelby County Probate Court pursuant to §
6-9-210, Ala. Code 1975.1
Section 6-9-210 provides:
1
2
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On August 21, 2014, the Carters entered into a contract
with the Nunleys for the sale of the property for a purchase
price of $438,900 ("the contract").  At the time the Carters
entered into the contract, the judgment liens against the
property had not been satisfied.  The preliminary settlement
statement for the sale of the property indicates that
$372,277.93 of the sale proceeds would be used to pay off the
outstanding mortgage held by MERS on the property.  The
preliminary settlement statement also indicates that, after
the mortgage had been satisfied and closing costs paid, the
"The owner of any judgment entered in any court
of this state or of the United States held in this
state may file in the office of the judge of probate
of any county of this state a certificate of the
clerk or register of the court by which the judgment
was entered, which certificate shall show the style
of the court which entered the judgment, the amount
and date thereof, the amount of costs, the names of
all parties thereto and the name of the plaintiff's
attorney and shall be registered by the judge of
probate in a book to be kept by him for that
purpose, which said register shall also show the
date of the filing of the judgment. Said judge shall
make a proper index to said book, which shall also
show under the proper letter or letters of the
alphabet the names of each and every defendant to
said judgment, and such judgments shall be recorded
in chronological order of the filing of such
judgments. Such certificate shall also show the
address of each defendant or respondent, as shown in
the court proceedings."
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net proceeds of the sale would be $27,129.14, which was to be
split equally between the Carters as joint tenants. 
Therefore, Kerry Carter, against whom the judgment liens were
entered, would only receive $13,564.57 as a result of the
proposed sale of the property to the Nunleys.
The first judgment creditor agreed to release its
judgment lien on the property in exchange for the $13,564.57
due Kerry Carter from the sale proceeds.  Although the record
does not indicate that the second or third judgment creditor
agreed to release its judgment lien against the property the
record is clear that Aliant refused to release its judgment
lien against the property.  Apparently, Aliant's refusal to
execute a release of its judgment lien inhibited the closing
of the contract.
On September 14, 2014, the Carters sued Aliant, alleging
that Aliant had intentionally and maliciously refused to
execute a partial release of the property "in order to
prohibit [Kerry] Carter from being able to fulfill his
obligations under the purchase contract even though all
profits due Kerry Carter are being disgorged and paid to the
appropriate 
judgment 
creditor, 
[the 
first 
judgment
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creditor]."   The Carters requested that the property be
2
released from Aliant's judgment lien against it.  The Carters
also requested that the circuit court enter a temporary
restraining order; the Carters did not explain what they
sought to temporarily restrain pending the outcome of their
action.
On October 3, 2014, Aliant filed an answer to the
Carters' complaint and a response to the Carters' request for
a temporary restraining order.  In its response to the
Carters' request for a temporary restraining order, Aliant
argued that it was not wrongfully interfering with the
contract because it held a valid judgment lien and further
that there existed "no mechanism for a judgment lien to be
avoided unless it is released, satisfied, or extinguished due
to the foreclosure of a prior lien, or if it is subject to
'lien stripping' under 11 U.S.C. §§ 506 and 1322 of the
Bankruptcy Code."
It appears that the Carters were asserting a claim of
2
intentional interference with a contract.  See Century 21
Academy Realty, Inc. v. Breland, 571 So. 2d 296, 297 (setting
forth the elements of a cause of action for intentional
interference with contractual relations).
5
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On October 8, 2014, following an ore tenus hearing, the
circuit court entered an order, which states, in pertinent
part:
"Accordingly, this Court hereby Orders that
Aliant Bank shall be enjoined and restrained from
interfering with the sale of the subject property,
--- Highway 13, Helena, Alabama 35080, from Kimberly
and Kerry Carter to Gregory and Robyn Nunley for the
purchase price of $438,900.00 as set out in the real
estate sales contract introduced as Plaintiff's
Exhibit 1. In accordance with the settlement
statement introduced into evidence as Plaintiff's
Exhibit 
2, 
the 
Court 
understands 
that 
the
proration's [sic] on said settlement statement will
vary as being governed by the date of closing. The
closing attorney, Clayton T. Sweeney, after the
payment of the first mortgage and all closing costs
and expenses as shown on the settlement statement
entered into evidence as Plaintiff's Exhibit 2 is
ordered to pay to [the first judgment creditor] any
and all proceeds due to be paid to Kerry Carter as
[it is] the first judgment creditor. Further, this
Court orders Clayton T. Sweeney to pay into this
Court any and all proceeds due to Kimberly Carter.
This Court hereby orders that all judgments of [the
second judgment creditor], [the third judgment
creditor,] and Aliant Bank ... shall herein be
transferred from the subject property and attach to
the proceeds to the extent that such judgment
creditors prove their entitlement. Kimberly Carter
shall also be entitled to establish her claim to
these proceeds. The payment of the funds into the
Court shall act as the security for the issuance of
the temporary restraining order."
On October 10, 2014, Aliant petitioned this Court for a
writ of mandamus directing the circuit court to vacate its
6
1140023
October 8, 2014, order.  On February 6, 2015, this Court
ordered that Aliant's petition for a writ of mandamus be
treated as a timely notice of appeal.  After this Court issued
the above order, Aliant filed its appellant's brief on April
21, 2015.  Instead of filing an appellee's brief, the Carters,
on May 21, 2015, filed a motion to dismiss Aliant's appeal as
moot, alleging that the property had been foreclosed upon by
MERS; the Carters did not present this Court with any evidence
indicating that MERS had, in fact, foreclosed upon the
property.  On May 26, 2015, Aliant filed a memorandum in
opposition to the Carters' motion to dismiss its appeal.  On
May 28, 2015, this Court issued a show-cause order directing
Aliant to demonstrate why the appeal was not moot.  On June 8,
2015, Aliant filed a memorandum in response to the show-cause
order that largely mirrored the arguments raised in its May
26, 2015, memorandum.
On November 3, 2015, this Court ordered the Carters to
file evidence with this Court in support of its motion to
dismiss the appeal as moot.  See South Alabama Gas Dist. v.
Knight, 138 So. 3d 971, 976 (Ala. 2013)("'[B]ecause mootness
is a jurisdictional issue, we may receive facts relevant to
7
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that issue; otherwise there would be no way to find out if an
appeal has become moot.' Clark v. K–Mart Corp., 979 F.2d 965,
967 (3d Cir. 1992). See also Jeffrey C. Dobbins, New Evidence
on Appeal, 96 Minn. L. Rev. 2016, 2030 (2012) ('[A]llegations
that a case is moot on appeal will often require an appellate
court to consider what is technically new evidence.').").  On
November 9, 2015, the Carters presented this Court with an
auctioneer's deed indicating that the Carters had 
defaulted on
the mortgage, that MERS had foreclosed on the property, and
that MERS had sold the property to Federal National Mortgage
Association ("FNMA") for $389,752.21.  
Aliant filed 
a 
response
on November 10, 2015.  From the evidence before us, it is
clear that the Carters no longer own the property.
Discussion
In their motion to dismiss Aliant's appeal as moot, the
Carters essentially argue that their claim of intentional
interference with a contract against Aliant is now moot
because, they say, the contract "is now legally impossible as
a result of the foreclosure.  The Carters no longer have legal
title to the subject residence to convey."  Accordingly, the
Carters argue that the injunctive relief they requested is no
8
1140023
longer attainable and that, consequently, the case is no
longer justiciable.  We agree.  
As a result of the foreclosure upon the property, the
injunctive relief ordered by the circuit court can have no
effect.  In Knight, this Court stated:
"When an action becomes moot during its
pendency, 
the 
court 
lacks 
power 
to 
further
adjudicate the matter.
"'"The test for mootness is commonly stated
as whether the court's action on the merits
would affect the rights of the parties."
Crawford v. State, 153 S.W.3d 497, 501
(Tex. App. 2004) (citing VE Corp. v. Ernst
& Young, 860 S.W.2d 83, 84 (Tex. 1993)). "A
case becomes moot if at any stage there
ceases to be an actual controversy between
the parties." Id. (emphasis added) (citing
National Collegiate Athletic Ass'n v.
Jones, 1 S.W.3d 83, 86 (Tex. 1999)).'
"Chapman v. Gooden, 974 So. 2d 972, 983 (Ala. 2007)
(first emphasis added). See also Steffel v.
Thompson, 415 U.S. 452, 459 n. 10, 94 S. Ct. 1209,
39 L. Ed. 2d 505 (1974) ('[A]n actual controversy
must be extant at all stages of review, not merely
at the time the complaint is filed.').
"....
"Events occurring subsequent to the entry or
denial of an injunction in the trial court may
properly be considered by this Court to determine
whether a cause, justiciable at the time the
injunction order is entered, has been rendered moot
on appeal. '[I]t is the duty of an appellate court
to consider lack of subject matter jurisdiction
9
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....' Ex parte Smith, 438 So. 2d 766, 768 (Ala.
1983). '[J]usticiability is jurisdictional.' Ex
parte State ex rel. James, 711 So. 2d 952, 960 n. 2
(Ala. 1998). A justiciable controversy is one that
'is definite and concrete, touching the legal
relations of the parties in adverse legal interest,
and it must be a real and substantial controversy
admitting of specific relief through a decree.'
Copeland v. Jefferson Cnty., 284 Ala. 558, 561, 226
So. 2d 385, 387 (1969). A case lacking ripeness has
yet to come into existence;  a moot case has died.
3
4
Between the two lies the realm of justiciability.
See 13B Charles Alan Wright et al., Federal Practice
and Procedure § 3533 (3d ed. 2008) ('It is not
enough that the initial requirements of standing and
ripeness have been satisfied; the suit must remain
alive throughout the course of litigation, to the
moment of final appellate disposition.').
"____________________
" Ripeness is '[t]he state of a dispute that has
3
reached, but has not passed, the point when the
facts have developed sufficiently to permit an
intelligent and useful decision to be made.' Black's
Law Dictionary 1442 (9th ed. 2009).
" A mootness analysis 'concentrate[s] attention
4
on the peculiar problems of a suit's death, rather
than its birth.' 13B Charles Alan Wright et al.,
Federal Practice and Procedure § 3533.1 (3d ed.
2008)."
138 So. 3d at 974-76.
In the present case, there is no longer an actual
controversy to be decided by this Court.  In their complaint
against Aliant, the Carters alleged that Aliant had
intentionally interfered with the 
contract.  The circuit court
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ordered "that Aliant Bank shall be enjoined and restrained
from interfering with the sale of the ... property ... from
Kimberly and Kerry Carter to Gregory and Robyn Nunley for the
purchase price of $438,900.00 as set out in the ... contract
introduced as Plaintiff's Exhibit 1."  (Emphasis added.)  It
is clear that the circuit court enjoined Aliant from
interfering with the contract.  The circuit court did not
broadly order that Aliant was permanently enjoined from
interfering with any contract between the Carters and the
Nunleys that may be entered into in the future.  Additionally,
the part of the circuit court's order concerning the potential
proceeds of the pending sale was dependent upon the Carters'
selling the property to the Nunleys.  The Carters, however,
never sold the property to the Nunleys.  Instead, while
Aliant's appeal to this Court was pending, the property was
foreclosed upon by MERS and then was sold to FNMA at an
auction.  As a result, the circuit court's order enjoining
Aliant from interfering with the contract is now moot; events
occurring after the order was entered have eliminated any
potential controversy arising from that order.  Thus, we do
not reach Aliant's arguments on the merits.
11
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Aliant raises numerous arguments in its response to the
Carters' motion to dismiss Aliant's appeal as moot.  First,
Aliant argues that, even though MERS foreclosed upon the
property and the property was sold to FNMA, "the Carters still
have the power to transfer their home to the Nunleys."  Aliant
reasons that the Carters have a right to redeem the property
within one year from the date of the foreclosure and that, if
they redeem the property, they could then sell the property to
the Nunleys free of Aliant's judgment lien.
Aliant's argument is not persuasive, because it ignores
the fact that the circuit court's order concerned only the
contract, i.e., the sales contract at issue in the present
case.  As stated above, the circuit court did not permanently
enjoin Aliant from ever enforcing its judgment lien against
the property.  Now that the contract is not capable of
performance, the entirety of the circuit court's order is
moot.  Assuming Aliant is correct in stating that the Carters
could redeem the property and then sell it to the Nunleys,
Aliant would not be enjoined by the circuit court's October 8,
2014, order from enforcing its judgment lien against the
property at some future date because the circuit court's order
12
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enjoined Aliant only from interfering with the contract.  This
situation is specifically addressed in § 6-5-248(d), 
Ala. Code
1975, which states:
"When any debtor, mortgagor, their transferees,
their respective spouses, children, heirs, or
devisees redeem, all recorded judgments, recorded
mortgages, and recorded liens in existence at the
time of the sale, are revived against the real
estate redeemed and against the redeeming party and
further redemption by some party other than the
mortgagor 
or 
debtor 
under 
this 
article 
is
precluded."
Should the Carters redeem the property, Aliant's lien against
the property would be revived and, as explained above, would
not be subject to the circuit court's October 8, 2014, order.
Next, Aliant argues that its appeal is not moot because,
it argues, the issue whether it was wrongfully enjoined or
restrained must be decided.  This is significant because "[a]
party that is wrongfully enjoined or restrained has 'a cause
of action for recovery under the surety bonds posted in
accordance with Rule 65(c)[, Ala. R. Civ. P].[ ]' Talladega
3
Rule 65(c), Ala. R. Civ. P., states:
3
"No restraining order or preliminary injunction
shall issue except upon the giving of security by
the applicant, in such sum as the court deems
proper, for the payment of such costs, damages, and
reasonable attorney fees as may be incurred or
suffered by any party who is found to have been
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Little League, Inc. v. Anderson, 577 So. 2d 1293, 1296 (Ala.
1991)."  Ex parte Waterjet Sys., Inc., 758 So. 2d 505, 510
(Ala. 1999).  Aliant's argument is based on the premise that
the circuit court entered a temporary restraining order
against Aliant; however, that premise is incorrect.  Although
the circuit court purported to enter a temporary restraining
order against Aliant, the circuit court actually entered a
permanent injunction against Aliant.
This Court has stated that "[i]t is well settled that the
purpose of granting a temporary restraining order or
preliminary injunction is to maintain the status quo until the
merits of the case can be determined. Hamilton v. City of
Birmingham, 28 Ala. App. 534, 189 So. 776 (1939)."  Ex parte
Health Care Mgmt. Grp. of Camden, Inc., 522 So. 2d 280, 282
(Ala. 1988).  The Carters' complaint consists of one
allegation 
of 
intentional 
interference 
with 
a 
contract 
against
Aliant.  The sole issue to be determined was whether Aliant
intentionally interfered with the contract by refusing to
wrongfully 
enjoined 
or 
restrained; 
provided,
however, no such security shall be required of the
State of Alabama or of an officer or agency thereof,
and provided further, in the discretion of the
court, no such security may be required in domestic
relations cases."
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partially release its judgment lien against the property.  The
circuit court's order decided that issue by determining that
Aliant had intentionally interfered with the contract and by
enjoining Aliant from further interfering with the contract. 
The only relief requested by the Carters in their complaint
was entirely granted in the circuit court's October 8, 2014,
order.  
Accordingly, the circuit court's order did not issue a
temporary restraining order preserving the status quo until
the merits of the case could be decided.  Instead, the circuit
court decided the merits of the case and entered a permanent
injunction against Aliant; the circuit court's order is a
final judgment, which Aliant challenges.  Accordingly, Rule
65(c), Ala. R. Civ. P., and its requirement that a bond be
provided in order to issue a restraining order or a
preliminary injunction does not apply.  Aliant's argument
under Rule 65 does not convince this Court that its appeal is
not moot.
Moreover, we note that a bond was never actually issued
in this case.  The circuit court's order required certain
proceeds of the pending sale to be paid into the circuit
15
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court, which would then "act as the security for the issuance
of the temporary restraining order."  However, as stated
above, the pending sale never came to fruition; thus, no
proceeds were paid into the circuit court as security for the
issuance of the "temporary restraining order."
Next, Aliant argues that its appeal is not moot because
"the question whether the [circuit] court erred in stripping
Aliant's judgment lien from the property must be decided
because that issue determines whether Aliant may redeem the
property from the ... foreclosure sale."  Aliant's argument is
based on the following portion of the circuit court's order:
"This Court hereby Orders that all judgments of [the second
judgment creditor], [the third judgment creditor,] and Aliant
Bank ... shall herein be transferred from the subject property
and attach to the proceeds to the extent that such judgment
creditors prove their entitlement."  Aliant argues that the
above portion of the circuit court's order "stripped" its
judgment lien against the property.
First, as explained above, the entirety of the circuit
court's order is moot and cannot be given effect because the
contract has been rendered incapable of being fulfilled. 
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Accordingly, the circuit court's order 
does not 
"strip" 
Aliant
of its judgment lien against the property.   Thus, as stated
4
above, we do not reach Aliant's arguments on the merits of
this appeal concerning whether "Alabama law provides [a]
procedure to 'avoid' a valid judgment lien."  Second, Aliant
has misinterpreted the circuit court's judgment.  
This portion
of the circuit court's order applied only if the pending sale
of the property occurred.  The circuit court ordered that
certain proceeds from the pending sale of the property would
be paid into the circuit court and that the various judgment
creditors' liens against the property would be transferred
from the property to the proceeds paid into the circuit court. 
However, the Carters never sold the property to the Nunleys;
thus, no proceeds from the sale were ever paid into the
circuit court.  As a result, the judgment creditors' liens did
not transfer from the property.  Therefore, Aliant's argument
does not demonstrate that its appeal is not moot.
Lastly, Aliant argues that its appeal is not moot because
"the question of whether a court may order property sold free
We offer no opinion as to the effect of MERS's
4
foreclosure and sale of the property on Aliant's judgment lien
against the property.
17
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and clear of judgment liens must be decided because that issue
is 'capable of repetition, yet evading review.'"  Aliant's
argument is unconvincing.
Aliant argues that the challenged action was too short in
duration to be fully litigated before its cessation or
expiration.  In McCoo v. State, 921 So. 2d 450, 458 (Ala.
2005), this Court stated:
"The capable-of-repetition-but-evading-review
exception has been applied in contexts that
generally involve a significant issue that cannot be
addressed by a reviewing court because of some
intervening factual circumstance, most often that
the issue will be resolved by the passage of a
relatively brief period of time. See, e.g., Roe v.
Wade, 410 U.S. 113, 93 S. Ct. 705, 35 L. Ed. 2d 147
(1973)(involving the termination of a pregnancy);
Moore v. Ogilvie, 394 U.S. 814, 89 S. Ct. 1493, 23
L. Ed. 2d 1 (1969)(involving challenges to election
procedures after the completion of the election);
and [State ex rel. ]Kernells [v. Ezell, 291 Ala.
440, 282 So. 2d 266, 270 (1973)] (same)."
Aliant also directs this Court's attention to Turner v.
Rogers, 564 U.S. 431 (2011), in which the United States
Supreme Court held that prison terms of one to two years did
not allow enough time for the matters concerning the
imprisonment to be fully litigated.
The present case is not the kind of case that fits within
the capable-of-repetition-but-evading-review exception.  The
18
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cases mentioned in McCoo and Turner as examples of cases that
do fit within the capable-of-repetition-but-evading-review
exception involve situations that necessarily end within a
brief passage of time (e.g., pregnancy, elections, and a
prison term of two years or less).  A claim alleging
intentional interference with a contract is different from
matters such as pregnancy, elections, and prison terms of less
than two years because a claim alleging intentional
interference with a contract does not necessarily end within
a brief passage of time.  The only reason review was cut short
in this case is because MERS happened to have a claim on the
property senior to Aliant's judgment lien.  Once MERS
foreclosed on the property, the circuit court's order
enjoining Aliant from interfering with the contract became
moot because the contract had become impossible to perform. 
Aliant argues that foreclosures in cases such as the present
case are "almost guaranteed" and that such foreclosures would
never allow enough time for appellate review.  However, Aliant
has not presented any evidence or supporting authority
indicating that foreclosures are "almost guaranteed" in cases
such as this one.  For instance, it is possible that in a
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future 
case 
in 
which 
Aliant 
is 
sued 
for 
allegedly
intentionally interfering with a contract for seeking to
enforce its judgment lien that Aliant's judgment lien would be
the most senior lien, and no foreclosure would moot Aliant's
appeal.  It could also be that there would be no foreclosure
at all.  In short, cases involving judgment creditors that
have been sued for intentionally interfering with a contract
for the sale of property against which they have filed a
judgment lien are not the kind of cases that are necessarily
mooted by a brief passage of time.
This is a peculiar case in which a judgment creditor was
permanently enjoined from interfering with a contract for the
sale of property.  Normally, a party that has been permanently
enjoined from interfering with a contract would have ample
time to seek appellate review.  This case had the additional
wrinkle of a foreclosure, which made the contract that was the
basis of the action impossible to perform.  As a result, the
circuit court's order enjoining Aliant became moot because
there was no longer a justiciable controversy.  However, a
claim alleging intentional interference with a contract does
not typically become moot within a brief passage of time. 
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Aliant has failed to demonstrate that this case fits within
the capable-of-repetition-but-evading-review exception to the
mootness doctrine.
Conclusion
We conclude that there is no longer a justiciable
controversy between Aliant and the Carters, a fact that
renders the case moot.  Therefore, this Court does not have
jurisdiction over Aliant's appeal; thus, we dismiss Aliant's
appeal.
APPEAL DISMISSED.
Moore, C.J., and Stuart, Bolin, Murdock, Main, and Wise,
JJ., concur.
Shaw and Bryan, JJ., concur in the result.
21