Title: Connie Hughes, as personal representative of the estate of Charles J. Hughes, deceased v. The Mitchell Company, Inc.
Citation: N/A
Docket Number: 1060109
State: Alabama
Issuer: Alabama Supreme Court
Date: April 9, 2010

Rel 04/09/2010 
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, 2009-2010 
1060109 
Connie Hughes, as p e r s o n a l r e p r e s e n t a t i v e o f the e s t a t e o f 
„ , 
-
. ^ 
_ -r. 
Hughes, deceased 
C h a r l e s J . 
v. 
The M i t c h e l l Company, 
I n c . 
1060201 
The M i t c h e l l Company, 
I n c . 
v. 
Connie Hughes, as p e r s o n a l r e p r e s e n t a t i v e o f the e s t a t e o f 
C h a r l e s J . Hughes, deceased 
Appeals from M o b i l e C i r c u i t Court 
(CV-03-4241) 
PER 
CURIAM. 
On 
December 
17, 
2003, 
C o n n i e 
Hughes, 
as 
p e r s o n a l 
r e p r e s e n t a t i v e o f t h e e s t a t e o f C h a r l e s J . Hughes, 
d e c e a s e d 
( " H u g h e s " ) , 
s u e d The M i t c h e l l Company, I n c . , 
i n t h e M o b i l e 
C i r c u i t 
C o u r t 
s e e k i n g 
r e c o v e r y 
o f 
p a s t - d u e 
m o n t h l y 
i n s t a l l m e n t s on a p r o m i s s o r y n o t e . 
B o t h p a r t i e s f i l e d m o t i o n s 
f o r a summary j u d g m e n t as t o a l l c l a i m s . 
The 
t r i a l 
c o u r t 
e n t e r e d a summary j u d g m e n t i n f a v o r o f Hughes i n 
t h e 
amount o f 
$ 1 , 6 7 7 . 0 1 p l u s 
i n t e r e s t a n d i n f a v o r o f The M i t c h e l l Company 
as t o a n y a d d i t i o n a l 
amounts 
s o u g h t . 
Hughes 
a p p e a l s ; The 
M i t c h e l l 
Company 
c r o s s - a p p e a l s . 
I n c a s e no. 1060109, we 
a f f i r m t h e summary j u d g m e n t i n p a r t , r e v e r s e i t 
i n p a r t , a n d 
remand. 
I n c a s e no. 1 0 6 0 2 0 1 , we a f f i r m t h e summary j u d g m e n t . 
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 
On o r a b o u t J a n u a r y 
25, 1996, Ken C h r i s t i a n a n d J u l i a n 
G r a d d i c k p u r c h a s e d a l l t h e e x i s t i n g 
s t o c k o f P l e a s u r e 
I s l a n d 
R e a l t y , 
I n c . ( " P I R " ) , 
a 
r e a l - e s t a t e - s a l e s , - l e a s i n g , 
a n d 
-management b u s i n e s s , 
f r o m C h a r l e s Hughes a n d C o n n i e Hughes 
f o r a 
t o t a l 
p u r c h a s e 
p r i c e o f $ 6 5 0 , 0 0 0 . 
As p a r t o f t h e 
c o n s i d e r a t i o n 
p a i d t o t h e H u g h e s e s , 
C h r i s t i a n a n d 
G r a d d i c k 
1060109, 1060201 
a g r e e d 
t o 
e x e c u t e 
a 
w r i t t e n 
p r o m i s s o r y 
n o t e 
( h e r e i n a f t e r 
r e f e r r e d t o as " t h e Hughes n o t e " ) i n t h e amount o f $ 2 3 3 , 0 0 0 
and p a y a b l e i n m o n t h l y 
i n s t a l l m e n t s , 
w i t h 
i n t e r e s t a t 8% p e r 
annum, o f $ 1 , 9 4 8 . 9 1 f o r 20 y e a r s b e g i n n i n g on F e b r u a r y 1, 
1996 
( h e r e i n a f t e r 
r e f e r r e d t o as " t h e Hughes i n d e b t e d n e s s " ) . 
The 
Hughes n o t e was 
n o t p r o d u c e d i n e v i d e n c e . 
I t has n e v e r b e e n 
l o c a t e d , 
and C o n n i e Hughes s t a t e d 
i n h e r 
a f f i d a v i t 
t h a t 
she 
has 
n e v e r 
s e e n 
i t . 
The 
H u g h e s e s 
r e c e i v e d 
t h e F e b r u a r y 
and 
M a r c h 1996 p a y m e n t s on t h e Hughes i n d e b t e d n e s s p u r s u a n t t o t h e 
Hughes n o t e . 
On M a r c h 
20, 
1996, 
The 
M i t c h e l l Company e n t e r e d i n t o 
a 
" p u r c h a s e and s a l e a g r e e m e n t " w i t h PIR, p r o v i d i n g f o r t h e 
s a l e 
o f 
c e r t a i n p r o p e r t y - m a n a g e m e n t 
c o n t r a c t s 
h e l d 
by 
PIR. 
The 
p u r c h a s e 
and 
s a l e 
a g r e e m e n t 
s p e c i f i e d 
a p u r c h a s e 
p r i c e 
o f 
$ 6 8 2 , 5 0 0 , 
t o 
be made 
up 
o f 
a 
c a s h 
c o m p o n e n t , 
a 
$ 1 0 0 , 0 0 0 
p r o m i s s o r y n o t e , and t h e a s s u m p t i o n by The M i t c h e l l Company o f 
some o f P I R ' s p r e e x i s t i n g i n d e b t e d n e s s e s . 
S p e c i f i c a l l y , 
t h e 
p u r c h a s e and s a l e a g r e e m e n t p r o v i d e d t h a t The M i t c h e l l Company 
" s h a l l 
assume 
and 
p a y 
i n a c c o r d a n c e 
w i t h 
i t s t e r m s 
t h a t 
c e r t a i n p r o m i s s o r y n o t e i n t h e o r i g i n a l amount o f $ 2 3 3 , 1 3 3 . 0 0 , 
by [ P I R ] , 
as maker, i n f a v o r 
o f [ C h a r l e s ] Hughes, as 
p a y e e , " 
a 
c o p y 
o f 
w h i c h 
was 
r e f e r e n c e d i n t h e 
p u r c h a s e 
and 
s a l e 
3 
1060109, 1060201 
a g r e e m e n t as a t t a c h e d , a l t h o u g h t h e n o t e was 
n o t a t t a c h e d . 
The 
p u r c h a s e 
and 
s a l e a g r e e m e n t 
a l s o 
r e q u i r e d The 
M i t c h e l l 
Company t o e x e c u t e and 
d e l i v e r a p r o m i s s o r y n o t e p a y a b l e t o 
PIR i n t h e amount o f $ 1 0 0 , 0 0 0 , w i t h i n t e r e s t a t 7% commencing 
M a r c h 
31, 
1996, 
t o be 
p a i d 
i n a payment 
o f $25,000 
w i t h 
a c c r u e d 
i n t e r e s t 
on S e p t e m b e r 
9, 
1996, 
w i t h 
t h e b a l a n c e 
o f 
$75,000 
and 
a c c r u e d 
i n t e r e s t 
t o be 
p a i d 
on M a r c h 
31, 
1997 
( h e r e i n a f t e r 
r e f e r r e d 
t o 
as 
" t h e 
p u r c h a s e 
n o t e " ) . 
The 
p u r c h a s e 
and 
s a l e 
a g r e e m e n t 
i n c l u d e d 
a p u r c h a s e - p r i c e -
a d j u s t m e n t 
c l a u s e : 
"The 
P u r c h a s e P r i c e 
s h a l l be i n c r e a s e d o r d e c r e a s e d 
on and as o f M a r c h 31, 1997 
i n a c c o r d a n c e w i t h 
t h i s 
P a r a g r a p h 3 ( c ) ( t h e ' P u r c h a s e P r i c e A d j u s t m e n t ' ) and 
t h e r e m a i n i n g p r i n c i p a l b a l a n c e o f t h e P u r c h a s e N o t e 
on 
t h a t 
d a t e 
s h a l l 
be 
i n c r e a s e d 
o r 
d e c r e a s e d 
t o 
r e f l e c t 
t h e P u r c h a s e 
P r i c e 
A d j u s t m e n t . 
I f , d u r i n g 
t h e 
p e r i o d 
commencing 
M a r c h 
31, 
1996 
and 
e n d i n g 
M a r c h 
31, 
1997 
( t h e 
' A d j u s t m e n t 
P e r i o d ' ) , 
g r o s s 
r e n t a l c o m m i s s i o n i n c o m e ( b u t e x c l u d i n g h o u s e k e e p i n g 
and 
m a i n t e n a n c e 
f e e 
i n c o m e ) a c t u a l l y 
r e c e i v e d 
by 
[ T h e M i t c h e l l Company] f r o m t h e C o n t r a c t s and F u t u r e 
C o n t r a c t s 
i s l e s s ( o r m o r e ) t h a n $ 2 8 9 , 0 9 8 . 0 0 , 
t h e 
P u r c h a s e P r i c e s h a l l be r e d u c e d ( o r i n c r e a s e d ) 
$2.36 
f o r 
e a c h 
$1.00 
o f 
s h o r t f a l l 
( o r o v e r a g e ) and 
t h e 
amount 
t h e n 
due 
on 
t h e 
P u r c h a s e 
N o t e , 
i n c l u d i n g 
b e g i n n i n g p r i n c i p a l and i n t e r e s t f r o m M a r c h 31, 
1996 
on s u c h new 
p r i n c i p a l amount, s h a l l be 
r e c a l c u l a t e d 
and p a i d . The P u r c h a s e P r i c e A d j u s t m e n t r e d u c t i o n o r 
i n c r e a s e , 
i f any, 
s h a l l 
n o t be 
l i m i t e d 
i n amount. 
Any P u r c h a s e P r i c e A d j u s t m e n t d e c r e a s e i n e x c e s s o f 
t h e amount o f p r i n c i p a l 
r e m a i n i n g u n p a i d u n d e r 
t h e 
P u r c h a s e N o t e 
s h a l l be p a i d i n c a s h by [ P I R ] t o [ T h e 
M i t c h e l l Company] on o r b e f o r e A p r i l 
15, 1997, 
and 
4 
1060109, 
1060201 
Ken 
C h r i s t i a n 
h e r e b y 
p e r s o n a l l y 
g u a r a n t e e s 
t h e 
payment 
t h e r e o f . " 
The M i t c h e l l Company p a i d t h e p u r c h a s e n o t e o f f e a r l y on J u n e 
24, 1996, f o r a d i s c o u n t e d payment o f $ 5 0 , 0 0 0 . 
A f t e r M a r c h 31, 1997, The M i t c h e l l Company c a l c u l a t e d t h e 
p u r c h a s e - p r i c e 
a d j u s t m e n t 
and 
d e t e r m i n e d 
t h a t 
P I R 
and 
C h r i s t i a n , as g u a r a n t o r , owed The M i t c h e l l Company a p u r c h a s e -
p r i c e a d j u s t m e n t o f $ 1 7 1 , 5 4 9 . 1 3 . 
P I R and C h r i s t i a n r e f u s e d t o 
p a y t h e p u r c h a s e - p r i c e a d j u s t m e n t , and The 
M i t c h e l l Company 
t h e n s u e d P I R and C h r i s t i a n i n t h e B a l d w i n C i r c u i t C o u r t . 
See 
M i t c h e l l Co. v. P l e a s u r e I s l a n d R e a l t y , I n c . , B a l d w i n 
C i r c u i t 
C o u r t , 
CV-97-1109. 
On 
A p r i l 
7, 
1998, 
t h e 
c i r c u i t 
c o u r t 
e n t e r e d j u d g m e n t 
a g a i n s t P I R and i n f a v o r 
o f The 
M i t c h e l l 
Company i n t h e amount o f $ 1 7 1 , 5 4 9 . 1 3 . 
T h a t j u d g m e n t has n o t 
b e e n s a t i s f i e d . 
The M i t c h e l l Company and C h r i s t i a n a g r e e d t o 
a s e t t l e m e n t and t o a r e l e a s e o f The M i t c h e l l Company's c l a i m s 
a g a i n s t C h r i s t i a n p e r s o n a l l y f o r a payment o f $20,000 made on 
December 20, 1999. 
On 
J u l y 
9, 
1997, 
C h a r l e s 
Hughes 
f i l e d 
a 
C h a p t e r 
11 
b a n k r u p t c y p e t i t i o n i n t h e U n i t e d S t a t e s B a n k r u p t c y C o u r t f o r 
t h e 
S o u t h e r n D i s t r i c t o f A l a b a m a . 
I n t h e d i s c l o s u r e 
s t a t e m e n t 
and 
s c h e d u l e s 
f i l e d 
u n d e r o a t h i n t h a t p r o c e e d i n g , C h a r l e s 
5 
1060109, 1060201 
Hughes 
r e p r e s e n t e d 
t o 
t h e 
b a n k r u p t c y 
c o u r t 
a n d 
t o h i s 
c r e d i t o r s t h a t he owned o n l y an " U n d i v i d e d ^ i n t e r e s t i n n o t e 
r e c e i v a b l e , 
M i t c h e l l Co., 
f u l l 
b a l a n c e $222,277.00 - 
D e b t o r 
owns ^ i n t . " 
An o r d e r c o n f i r m i n g C h a r l e s H u g h e s ' s C h a p t e r 11 
b a n k r u p t c y p l a n was e n t e r e d b y t h e b a n k r u p t c y c o u r t on May 18, 
1 
998, 
and t h e b a n k r u p t c y 
c a s e was 
c l o s e d on J u l y 22, 1998. 
C h a r l e s Hughes d i e d on December 7, 1999. 
As 
o f December 
15, 
1999, t h e u n p a i d 
b a l a n c e 
on t h e 
j u d g m e n t 
a w a r d i n g 
t h e p u r c h a s e - p r i c e a d j u s t m e n t , 
i n c l u d i n g 
a c c r u e d 
i n t e r e s t , 
was 
a p p r o x i m a t e l y $ 1 8 7 , 0 0 0 , w i t h 
o n g o i n g 
i n t e r e s t a c c r u i n g a t t h e r a t e o f 12%. 
I n a c c o r d a n c e w i t h t h e 
Hughes n o t e , The M i t c h e l l Company h a d t i m e l y p a i d 
s c h e d u l e d 
m o n t h l y p a y m e n t s on t h e Hughes i n d e b t e d n e s s t h r o u g h December 
1999. 
By 
l e t t e r o f J a n u a r y 12, 2000, The M i t c h e l l Company 
i n f o r m e d C o n n i e Hughes t h a t e f f e c t i v e J a n u a r y 2000 i t 
w o u l d no 
l o n g e r be s e r v i c i n g 
P I R ' s 
o b l i g a t i o n u n d e r t h e Hughes 
n o t e . 
The M i t c h e l l Company's 
p o s i t i o n was b a s e d on i t s b e l i e f 
t h a t 
i t 
h a d no 
f u r t h e r 
o b l i g a t i o n 
u n d e r 
t h e p u r c h a s e 
and 
s a l e 
a g r e e m e n t w i t h P I R t o make p a y m e n t s on t h e Hughes i n d e b t e d n e s s 
b e c a u s e t h e u n p a i d b a l a n c e owed b y P I R on t h e j u d g m e n t , a f t e r 
a p p l y i n g b o t h t h e $20,000 s e t t l e m e n t payment f r o m 
C h r i s t i a n 
and 
t h e a c c r u a l 
o f t h e s t a t u t o r y 
12% 
r a t e 
o f 
i n t e r e s t 
on 
6 
1060109, 1060201 
u n p a i d j u d g m e n t , more t h a n o f f s e t t h e 
r e m a i n i n g 
i n s t a l l m e n t s 
due 
on t h e Hughes i n d e b t e d n e s s as t h o s e i n s t a l l m e n t s 
f e l l 
due. 
On 
J u l y 
1 
0 , 
20 00 , C o n n i e Hughes 
i n d i v i d u a l l y s u e d 
The 
M i t c h e l l Company as a t h i r d - p a r t y b e n e f i c i a r y o f The 
M i t c h e l l 
Company's c o n t r a c t u a l 
o b l i g a t i o n s 
t o 
PIR 
u n d e r 
t h e 
p u r c h a s e 
and 
s a l e a g r e e m e n t 
( t h a t a c t i o n 
w i l l 
h e r e i n a f t e r 
be 
r e f e r r e d 
t o 
as "Hughes 
I " ) . 
The 
M i t c h e l l Company 
f i l e d 
a m o t i o n 
t o 
d i s m i s s 
t h e 
a c t i o n , 
a s s e r t i n g 
t h a t 
C h a r l e s Hughes, 
who 
was 
d e c e a s e d , was 
t h e 
s o l e p a y e e o f t h e Hughes i n d e b t e d n e s s 
and, 
t h u s , 
t h a t 
The 
M i t c h e l l Company 
had 
no 
o b l i g a t i o n 
t o 
pay 
C o n n i e Hughes i n d i v i d u a l l y . 
The 
c i r c u i t 
c o u r t 
h e l d 
t h a t 
t h e 
e s t a t e 
o f 
C h a r l e s 
Hughes 
was 
an 
i n d i s p e n s a b l e 
p a r t y 
and 
c o n d i t i o n a l l y 
g r a n t e d 
The 
M i t c h e l l 
Company's 
m o t i o n 
t o 
d i s m i s s , 
t h e 
c o n d i t i o n b e i n g t h a t C h a r l e s H u g h e s ' s e s t a t e 
be 
a d d e d as a p a r t y w i t h i n 30 d a y s . 
The 
e s t a t e 
o f C h a r l e s Hughes 
was 
a d d e d 
as 
a 
p l a i n t i f f , 
and 
b o t h 
s i d e s 
f i l e d 
summary-
j u d g m e n t m o t i o n s . 
The 
c i r c u i t 
c o u r t 
d e t e r m i n e d 
t h a t 
" C o n n i e Hughes, 
as 
p e r s o n a l 
r e p r e s e n t a t i v e 
o f 
t h e 
E s t a t e 
o f C h a r l e s Hughes, S r . i s e n t i t l e d t o summary 
j u d g m e n t 
i n 
h e r 
f a v o r 
as 
a m a t t e r 
o f 
l a w 
a g a i n s t 
[T]he 
M i t c h e l l 
Company, 
I n c . 
f o r 
$60,416.21 
p r i n c i p a l , 
r e p r e s e n t i n g 
m o n t h l y 
p a y m e n t s 
t h r o u g h 
J u l y 
31, 
2002, 
i n t e r e s t 
o f 
$ 1 9 1 2 . 6 6 , 
r e p r e s e n t i n g 
i n t e r e s t 
on 
t h e 
p r i n c i p a l p o r t i o n 
o f 
s a i d 
m o n t h l y 
p a y m e n t s 
t h r o u g h 
J u l y 
31, 
2002, 
and 
i n t e r e s t 
h e r e a f t e r 
a c c r u i n g , " 
7 
1060109, 1060201 
and 
t h a t 
"The 
M i t c h e l l Company, I n c . 
i s e n t i t l e d 
t o summary 
j u d g m e n t 
as m a t t e r 
o f 
l a w 
i n i t s f a v o r 
d i s m i s s i n g 
t h e 
c l a i m o f C o n n i e W. 
Hughes, 
i n d i v i d u a l l y . " 
The 
M i t c h e l l 
Company 
a p p e a l e d , 
and 
t h i s 
C o u r t 
a f f i r m e d , 
w i t h o u t 
an 
o p i n i o n , 
t h e 
c i r c u i t 
c o u r t ' s 
j u d g m e n t . 
M i t c h e l l 
Co. 
v. 
Hughes 
(No. 
1 0 2 0 0 2 3 ) , 
88 6 
So. 
2d 
904 
( A l a . 
2003) 
( t a b l e ) . 
F o l l o w i n g 
t h e 
d i s p o s i t i o n o f 
Hughes 
I , 
The 
M i t c h e l l 
Company s a t i s f i e d 
t h e j u d g m e n t e n t e r e d 
a g a i n s t 
i t b u t 
f a i l e d 
t o make any 
f u r t h e r p a y m e n t s 
t h a t came due 
a f t e r J u l y 
31, 
2002. 
On December 17, 2003, Hughes s u e d The 
M i t c h e l l Company 
f o r 
r e c o v e r y 
o f 
t h e 
p a s t - d u e m o n t h l y 
i n s t a l l m e n t s 
a c c r u i n g 
f r o m A u g u s t 1, 2 0 0 2 , t h r o u g h December 17, 2003. 
B o t h p a r t i e s 
f i l e d summary-judgment m o t i o n s . 
The 
c i r c u i t 
c o u r t 
e n t e r e d 
a 
f i n a l j u d g m e n t d i s p o s i n g o f a l l c l a i m s , 
as 
f o l l o w s : 
" I n 
c o n s i d e r i n g 
de 
novo 
t h e 
a r g u m e n t s 
and 
a u t h o r i t i e s 
a d v a n c e d 
by 
t h e 
p a r t i e s 
i n 
t h i s 
c a s e 
upon t h e 
f a c t s p r e s e n t e d , 
t h i s C o u r t c o n c l u d e s 
(a) 
t h a t 
[The] 
M i t c h e l l 
[Company's] p o s i t i o n t h a t i t i s 
l e g a l l y e n t i t l e d t o o f f s e t t h e u n p a i d b a l a n c e o f i t s 
j u d g m e n t 
a g a i n s t 
[ P I R ] , 
w i t h 
i n t e r e s t a c c r u e d 
and 
a c c r u i n g 
a t 
t h e 
j u d g m e n t 
r a t e 
o f 
12%, 
a g a i n s t 
i n s t a l l m e n t s 
on 
t h e 
Hughes 
i n d e b t e d n e s s 
as 
t h e y 
m a t u r e i s w e l l t a k e n ; 
(b) t h a t , c o n s i s t e n t w i t h 
t h e 
O r d e r 
and 
Judgment 
i n 
[Hughes 
I ] , 
[The] 
M i t c h e l l 
[Company's] c o m p u t a t i o n 
o f 
t h e 
a p p l i c a t i o n o f 
t h a t 
o f f s e t 
i s s u b j e c t 
t o a d j u s t m e n t b a s e d on 
a 
p a r t i a l 
w a i v e r 
o f 
$77,625.00 
o f 
t h e 
o f f s e t 
amount 
as 
8 
1060109, 
1060201 
c o n t e n d e d 
by 
[ H u g h e s ] ; 
and 
(c) 
t h a t 
u n d e r 
t h e 
p r i n c i p l e s o f j u d i c i a l 
e s t o p p e l 
[Hughes] i s b a r r e d 
f r o m c l a i m i n g e n t i t l e m e n t t o more t h a n h a l f o f t h e 
b a l a n c e o f t h e Hughes 
i n d e b t e d n e s s . 
"15. 
The 
p a r t i e s 
a r e 
i n a g r e e m e n t 
t h a t 
t h e 
p r i n c i p a l 
b a l a n c e 
owed 
on 
t h e 
e n t i r e 
Hughes 
i n d e b t e d n e s s 
a f t e r 
payment 
o f t h e December, 
1999 
i n s t a l l m e n t was 
$ 2 1 1 , 2 4 9 . 8 7 , 
o f w h i c h 
[Hughes] i s 
j u d i c i a l l y e s t o p p e d t o c l a i m t o h a v e b e e n owed more 
t h a n $105, 
624.94 
w i t h 
i n t e r e s t 
a t 8%. 
H a l f o f t h e 
$93,498.39 
t o t a l 
o f f s e t 
b a l a n c e 
t o 
w h i c h 
[The 
M i t c h e l l Company] was e n t i t l e d as o f J a n u a r y 1, 2000 
( $ 4 6 , 7 4 9 . 2 0 ) , w i t h s u b s e q u e n t l y a c c r u i n g i n t e r e s t a t 
t h e j u d g m e n t r a t e w o u l d h a v e b e e n u s a b l e t o 
o f f s e t 
[ H u g h e s ' s ] 
h a l f 
o f t h e i n d e b t e d n e s s 
'on t h e b a c k 
e n d . ' The 
i n s t a l l m e n t s 
r e c o v e r e d by 
[Hughes] u n d e r 
t h e 
O r d e r 
and 
Judgment 
i n 
[Hughes 
I ] 
were 
31 
i n s t a l l m e n t s o f $ 1 9 4 8 . 9 1 . A f t e r a p p l y i n g 31 m o n t h l y 
p a y m e n t s 
o f $1948.91 
e a c h t o t h e 
a m o r t i z a t i o n 
o f 
$105,624.93 
a t 8%, t h e r e m a i n i n g 
p r i n c i p a l 
b a l a n c e 
c l a i m a b l e by [Hughes] w o u l d be $ 6 2 , 9 1 8 . 4 6 . A f t e r 31 
m o n t h s , t h e $46,749.20 
o f f s e t j u d g m e n t b a l a n c e 
w i t h 
a c c r u e d 
i n t e r e s t 
a t 
12% 
w o u l d 
h a v e 
amounted 
t o 
$61,241.45 
[Hughes] i s j u d i c i a l l y 
e s t o p p e d t o 
c l a i m 
t h a t 
t h e p a y m e n t s made u n d e r t h e O r d e r and 
Judgment 
i n [Hughes I ] d i d n o t 
s a t i s f y 
i t s e n t i r e 
c l a i m 
a g a i n s t 
[The M i t c h e l l Company] f o r s e r v i c i n g 
o f t h e Hughes 
i n d e b t e d n e s s e x c e p t t o t h e e x t e n t o f 
t h e $1,677.01 
d i f f e r e n t i a l , w i t h i n t e r e s t a t 8% f r o m 
J u l y 31, 2002 
u n t i l 
p a i d . 
"16. [ H u g h e s ' s ] m o t i o n f o r summary 
j u d g m e n t i s 
h e r e b y 
g r a n t e d 
t o 
t h e 
e x t e n t 
o f 
t h e 
e n t r y 
o f 
j u d g m e n t a g a i n s t 
[The M i t c h e l l Company] i n f a v o r o f 
C o n n i e W. 
Hughes 
as P e r s o n a l R e p r e s e n t a t i v e o f t h e 
E s t a t e 
o f 
C h a r l e s 
Hughes, 
S r . 
i n 
t h e 
sum 
o f 
$ 1 6 7 7 . 0 1 , p l u s 
i n t e r e s t 
a t e i g h t 
p e r c e n t 
(8%) p e r 
annum 
f r o m 
J u l y 
31, 
2002 
u n t i l 
p a i d . 
[ H u g h e s ' s ] 
m o t i o n f o r summary j u d g m e n t i s o t h e r w i s e 
d e n i e d . 
9 
1060109, 1060201 
"17. The [ M i t c h e l l Company's] m o t i o n f o r summary 
j u d g m e n t i s h e r e b y 
g r a n t e d 
i n s o f a r as i t s e e k s a 
d e t e r m i n a t i o n 
t h a t 
C o n n i e 
W. 
Hughes 
as P e r s o n a l 
R e p r e s e n t a t i v e o f t h e E s t a t e o f C h a r l e s Hughes, S r . 
i s 
j u d i c i a l l y e s t o p p e d t o c l a i m o r c o l l e c t f r o m [The 
M i t c h e l l Company] any f u r t h e r amount i n e x c e s s o f 
t h e sum o f $ 1 6 7 7 . 0 1 , p l u s 
i n t e r e s t a t e i g h t p e r c e n t 
(8%) 
p e r annum 
f r o m 
J u l y 
3 1 , 2002 
u n t i l 
p a i d . 
[ H u g h e s ' s ] 
m o t i o n f o r 
summary j u d g m e n t i s o t h e r w i s e 
d e n i e d . " 
Hughes a p p e a l e d , a n d The M i t c h e l l Company c r o s s - a p p e a l e d . 
S t a n d a r d o f R e v i e w 
T h i s C o u r t h a s p r e v i o u s l y s t a t e d t h e s t a n d a r d by w h i c h 
i t 
r e v i e w s t h e c i r c u i t c o u r t ' s d i s p o s i t i o n o f a summary-judgment 
m o t i o n : 
" ' I n r e v i e w i n g t h e d i s p o s i t i o n o f a m o t i o n f o r 
summary 
j u d g m e n t , 
we 
u t i l i z e t h e same s t a n d a r d as 
t h a t o f t h e t r i a l 
c o u r t i n d e t e r m i n i n g w h e t h e r t h e 
e v i d e n c e b e f o r e t h e c o u r t made o u t a g e n u i n e 
i s s u e 
o f 
m a t e r i a l 
f a c t ' 
a n d 
w h e t h e r 
t h e movant 
was 
e n t i t l e d t o a j u d g m e n t as a m a t t e r o f l a w . 
B u s s e y 
 
v. J o h n D e e r e Co., 531 So. 2d 860, 862 ( A l a . 1 9 8 8 ) ; 
R u l e 5 6 ( c ) , A l a . 
R. C i v . 
P. 
When t h e movant makes 
a p r i m a f a c i e s h o w i n g t h a t t h e r e i s 
no g e n u i n e 
i s s u e 
o f 
m a t e r i a l 
f a c t , 
t h e b u r d e n 
t h e n 
s h i f t s 
t o t h e 
nonmovant t o p r e s e n t s u b s t a n t i a l e v i d e n c e 
c r e a t i n g 
s u c h an i s s u e . 
B a s s v . S o u t h T r u s t Bank o f B a l d w i n  
C o u n t y , 
538 
So. 
2d 
794, 
797-98 
( A l a . 1 9 8 9 ) . 
E v i d e n c e i s ' s u b s t a n t i a l ' i f 
i t 
i s o f ' s u c h w e i g h t 
and q u a l i t y t h a t f a i r - m i n d e d p e r s o n s i n 
t h e e x e r c i s e 
o f 
i m p a r t i a l 
j u d g m e n t 
c a n r e a s o n a b l y 
i n f e r t h e 
e x i s t e n c e o f t h e f a c t s o u g h t t o be p r o v e d . ' 
West v .  
F o u n d e r s 
L i f e A s s u r a n c e Co. o f F l o r i d a , 547 So. 2d 
870, 871 ( A l a . 1 9 8 9 ) . " 
10 
1060109, 1060201 
Ex 
p a r t e 
G e n e r a l 
M o t o r s 
C o r p . , 
769 So. 2d 903, 90 
6 ( A l a . 
1 9 9 9 ) . 
See a l s o Brown v . S t . V i n c e n t ' s Hosp., 899 So. 2d 227, 
233 ( A l a . 2 0 0 4 ) . 
"Our r e v i e w i s f u r t h e r s u b j e c t t o t h e c a v e a t 
t h a t 
t h i s 
C o u r t 
must 
r e v i e w 
t h e 
r e c o r d 
i n a 
l i g h t 
most 
f a v o r a b l e 
t o t h e nonmovant 
and must 
r e s o l v e a l l r e a s o n a b l e 
d o u b t s a g a i n s t t h e m o v a n t . " 
W i l m a C o r p . v. F l e m i n g F o o d s o f  
A l a b a m a , I n c . , 613 So. 2d 359, 362 ( A l a . 1 9 9 3 ) . 
D i s c u s s i o n 
Hughes a r g u e s 
t h a t t h e c i r c u i t 
c o u r t 
e r r e d b y 
a l l o w i n g 
The 
M i t c h e l l 
Company 
t o 
a p p l y 
t h e u n p a i d 
b a l a n c e 
o f i t s 
j u d g m e n t 
a g a i n s t 
P I R 
as 
an 
o f f s e t 
a g a i n s t 
t h e 
Hughes 
i n d e b t e d n e s s . 
I n e n t e r i n g a summary j u d g m e n t i n f a v o r o f The 
M i t c h e l l Company, t h e c i r c u i t 
c o u r t h e l d , i n p e r t i n e n t 
p a r t : 
"The Supreme C o u r t o f A l a b a m a 
s t i l l 
f o l l o w s t h e 
g e n e r a l 
l a w o f c o n t r a c t s 
t h a t when a 
t h i r d 
p a r t y 
b e n e f i c i a r y o f a c o n t r a c t i s e n t i t l e d t o m a i n t a i n 
a 
d i r e c t a c t i o n on a c o n t r a c t t h a t 
r i g h t o f a c t i o n i s 
s u b j e c t t o a l l l i m i t a t i o n s i n t h e c o n t r a c t and ' t o 
s u p e r v e n i n g 
d e f e n s e s 
a r i s i n g 
b y 
v i r t u e 
o f i t s 
t e r m s . ' 
R e s t a t e m e n t 
C o n t r a c t s 
2d, 
§309(c) 
(2000 
S u p p . ) . 
" ' I t 
i s a 
w e l l - e s t a b l i s h e d 
p r i n c i p l e 
o f 
A l a b a m a l a w t h a t a c o n t r a c t made f o r t h e 
b e n e f i t 
o f 
a 
t h i r d 
p e r s o n 
may, 
a t h i s 
e l e c t i o n , be a c c e p t e d and e n f o r c e d b y h i m . 
M i c h i e v . B r a d s h a w , 227 A l a . 302, 149 So. 
809 
( 1 9 3 3 ) . 
However, 
" [ i ] f he 
c l a i m s 
t h e 
b e n e f i t s [ o f t h e c o n t r a c t ] , he a l s o assumes 
t h e b u r d e n s . " M i c h i e , 227 A l a . a t 308, 149 
11 
1060109, 1060201 
So. 
a t 
814. 
See 
a l s o , 
Ex 
p a r t e D y e s s , 
709 
So. 
2d 
447 
( A l a . 
1997) 
( n o n s i g n a t o r y 
p l a i n t i f f 
c l a i m i n g 
t h e 
b e n e f i t 
o f 
a 
c o n t r a c t 
as 
a 
t h i r d - p a r t y 
b e n e f i c i a r y 
i s 
s u b j e c t 
t o 
a r b i t r a t i o n a g r e e m e n t 
w i t h i n 
t h a t 
c o n t r a c t ) . 
"The 
l a w 
i s c l e a r 
t h a t 
a 
t h i r d 
p a r t y 
b e n e f i c i a r y 
i s b o u n d 
by 
t h e 
t e r m s and 
c o n d i t i o n s 
o f 
t h e 
c o n t r a c t 
t h a t 
i t 
a t t e m p t s 
t o 
i n v o k e . 
'The 
b e n e f i c i a r y 
c a n n o t 
a c c e p t 
t h e 
b e n e f i t s 
and 
a v o i d 
t h e 
b u r d e n s 
o f 
l i m i t a t i o n s 
o f 
a 
c o n t r a c t . ' " 
I n t e r p o o l 
L t d . 
v. 
T h r o u g h 
T r a n s p o r t 
Mut. 
 
I n s . 
A s s ' n 
L t d . , 
635 
F. 
Supp. 
1503, 
1505 
(S.D. 
F l a . 
1 9 8 5 ) , 
q u o t i n g 
T r a n s B a v 
 
E n g i n e e r s 
& B u i l d e r s , 
I n c . 
v. 
H i l l s , 
5 51 
F.2d 
370, 
378 
(D.C. 
C i r . 1 9 7 6 ) . 
See 
Dunn 
 
C o n s t r . 
Co. 
v. 
S u g a r 
B e a c h 
C o n d o m i n i u m 
 
A s s ' n , 
I n c . , 
760 
F. Supp. 
1479 
(S.D. 
A l a . 
19 9 1 ) ; 
Lee 
v. 
G r a n d c o r 
M e d i c a l 
S y s t e m s , 
 
I n c . , 
702 
F. Supp. 252, 
255 
(D. C o l o . 
1988) 
("A 
t h i r d 
p a r t y 
b e n e f i c i a r y must a c c e p t 
a 
c o n t r a c t ' s 
b u r d e n s 
a l o n g 
w i t h 
i t s 
b e n e f i t s " ) . 
I t 
i s 
t h u s 
c l e a r 
t h a t 
a 
t h i r d - p a r t y 
b e n e f i c i a r y 
c a n n o t a c c e p t 
t h e 
b e n e f i t 
o f 
a c o n t r a c t , 
w h i l e 
a v o i d i n g 
t h e 
b u r d e n s 
o r 
l i m i t a t i o n s o f 
t h a t 
c o n t r a c t . ' 
" G e o r g i a Power Co. 
v. 
P a r t i n , 727 
So. 
2d 
2, 
5 
( A l a . 
1 9 9 8 ) . C o n s e q u e n t l y , any 
c l a i m b r o u g h t a g a i n s t 
[The 
M i t c h e l l 
Company] 
by 
a 
h o l d e r 
o f 
t h e 
Hughes 
i n d e b t e d n e s s 
as 
a 
t h i r d 
p a r t y 
b e n e f i c i a r y 
o f 
t h e 
c o n t r a c t u a l 
o b l i g a t i o n s o f 
[The 
M i t c h e l l Company] t o 
[PIR] 
t o pay 
t h e Hughes i n d e b t e d n e s s 
i s s u b j e c t 
t o 
t h e same r i g h t s , d e f e n s e s , and 
o f f s e t s 
[The 
M i t c h e l l 
Company] w o u l d h a v e a g a i n s t 
[PIR] 
i f i t b r o u g h t 
an 
a c t i o n 
b a s e d 
on 
s u c h 
o b l i g a t i o n s . 
W h i l e 
t h e 
c o n c l u s i o n 
m i g h t 
be 
d i f f e r e n t 
i f 
t h e 
f a c t s 
d e m o n s t r a t e d a n o v a t i o n by a g r e e m e n t o f t h e 
p a r t i e s 
where t h e 
o b l i g a t i o n t o pay 
t h e Hughes i n d e b t e d n e s s 
had b e e n f o r m a l l y assumed by 
[The 
M i t c h e l l Company] 
upon 
r e l e a s e 
o f 
t h e 
e x i s t i n g 
o b l i g o r s 
on 
s u c h 
i n d e b t e d n e s s , w i t h 
t h e 
s u b s t i t u t i o n i n 
f u l l 
o f 
[The 
M i t c h e l l 
Company] 
f o r 
s u c h 
o b l i g o r s , 
no 
s u c h 
12 
1060109, 1060201 
n o v a t i o n 
i s d e m o n s t r a t e d t o have o c c u r r e d 
u n d e r 
t h e 
f a c t s 
h e r e . " 
Hughes 
a l l e g e s 
t h a t 
t h e 
c i r c u i t 
c o u r t 
e r r e d 
i n 
a p p l y i n g 
g e n e r a l 
p r i n c i p l e s o f 
c o n t r a c t 
l a w 
c o n c e r n i n g 
t h i r d - p a r t y 
b e n e f i c i a r i e s t o t h i s c a s e . 
Hughes r e l i e s on S c h n e i d e r M o v i n g  
& S t o r a g e Co. 
v. R o b b i n s , 466 
U.S. 
364 
( 1 9 8 4 ) , and a r g u e s 
t h a t 
" ' [ w ] h e r e t h e l a n g u a g e o f t h e 
c o n t r a c t , 
o r t h e 
c i r c u m s t a n c e s 
u n d e r w h i c h i t was 
e x e c u t e d , e s t a b l i s h t h a t 
t h e p a r t i e s h a v e 
p r o v i d e d 
t h a t 
t h e 
r i g h t 
o f 
t h e 
b e n e f i c i a r y 
i s 
n o t 
t o 
be 
a f f e c t e d by any d e f e n s e s t h a t t h e p r o m i s o r m i g h t have 
a g a i n s t 
t h e p r o m i s e e , t h e r u l e i s i n a p p l i c a b l e . ' " (Hughes's b r i e f , 
a t 
44) 
( q u o t i n g 
S c h n e i d e r , 
466 
U.S. 
a t 
3 7 1 ) . 
I n S c h n e i d e r , 
t h e 
U n i t e d 
S t a t e s 
Supreme C o u r t 
h e l d , 
i n 
p e r t i n e n t 
p a r t : 
"[The 
p r o m i s o r s ] 
a r g u e 
t h a t 
as 
t h i r d - p a r t y 
b e n e f i c i a r i e s 
o f 
t h e 
c o l l e c t i v e - b a r g a i n i n g 
a g r e e m e n t s , 
t h e 
t r u s t e e s 
a r e 
b o u n d 
by 
t h e 
a r b i t r a t i o n 
c l a u s e s 
p r o v i d e d 
t h e r e i n 
t o 
t h e 
same 
e x t e n t 
t h e 
[ p r o m i s e e ] w o u l d 
be 
i f i t were 
s e e k i n g 
j u d i c i a l 
e n f o r c e m e n t 
o f 
t h o s e 
a g r e e m e n t s . 
[The 
p r o m i s o r s ] 
r e l y 
on 
t h e 
g e n e r a l 
r u l e 
t h a t 
t h e 
p r o m i s o r 
may 
a s s e r t 
a g a i n s t 
t h e 
b e n e f i c i a r y 
any 
d e f e n s e t h a t he c o u l d a s s e r t a g a i n s t 
t h e p r o m i s e e i f 
t h e 
p r o m i s e e 
were 
s u i n g 
on 
t h e 
c o n t r a c t . 
See 
R e s t a t e m e n t 
(Second) o f 
C o n t r a c t s 
§ 309, 
Comment b 
( 1 9 8 1 ) ; S. W i l l i s t o n , C o n t r a c t s 
§ 395 
(3d ed. 
1 9 5 9 ) ; 
4 
A. 
C o r b i n , 
C o n t r a c t s 
§ 
819 
( 1 9 5 1 ) . 
T h a t 
r u l e , 
h o w e v e r , i s m e r e l y a r u l e o f c o n s t r u c t i o n u s e f u l 
i n 
d e t e r m i n i n g 
c o n t r a c t u a l 
i n t e n t . 
I t 
s h o u l d 
n o t 
be 
a p p l i e d so 
i n f l e x i b l y 
as t o d e f e a t 
t h e 
i n t e n t i o n o f 
13 
1060109, 1060201 
t h e p a r t i e s . Where t h e l a n g u a g e o f t h e c o n t r a c t , o r 
t h e 
c i r c u m s t a n c e s 
u n d e r 
w h i c h 
i t was 
e x e c u t e d , 
e s t a b l i s h 
t h a t t h e p a r t i e s h a v e p r o v i d e d t h a t t h e 
r i g h t o f t h e b e n e f i c i a r y i s n o t t o be a f f e c t e d b y 
any 
d e f e n s e s 
t h a t t h e p r o m i s o r m i g h t h a v e 
a g a i n s t 
t h e p r o m i s e e , t h e r u l e i s i n a p p l i c a b l e . 
R e s t a t e m e n t 
(Second) o f C o n t r a c t s § 309, Comment b ( 1 9 8 1 ) . See 
a l s o 4 A. C o r b i n , C o n t r a c t s §§ 818, 819 ( 1 9 5 1 ) . " 
S c h n e i d e r , 
466 U.S. 
a t 370-71 
( f o o t n o t e 
o m i t t e d ) . 
The 
S c h n e i d e r 
C o u r t 
d e t e r m i n e d 
t h a t 
i f s u c h 
an 
i n t e n t i o n 
t o 
p r o t e c t 
t h e 
t h i r d - p a r t y 
b e n e f i c i a r y 
was 
f o u n d , 
t h e n t h e 
g e n e r a l r u l e w o u l d n o t a p p l y . 
Hughes a r g u e s t h a t t h e S c h n e i d e r e x c e p t i o n s h o u l d a p p l y 
b e c a u s e , she s a y s , t h e f o l l o w i n g 
l a n g u a g e 
f r o m t h e p u r c h a s e 
and 
s a l e a g r e e m e n t e v i d e n c e s The M i t c h e l l Company and P I R ' s 
i n t e n t t o i n s u l a t e t h e H u g h e s e s f r o m any d e f e n s e s The M i t c h e l l 
Company may h a v e a s s e r t e d a g a i n s t P I R b y r e q u i r i n g 
t h a t any 
p u r c h a s e - p r i c e a d j u s t m e n t t o w h i c h The M i t c h e l l Company may 
h a v e b e e n e n t i t l e d was t o come f r o m P I R a n d / o r 
C h r i s t i a n : 
"Any P u r c h a s e P r i c e A d j u s t m e n t d e c r e a s e i n e x c e s s o f 
t h e amount o f p r i n c i p a l 
r e m a i n i n g u n p a i d u n d e r t h e 
P u r c h a s e N o t e 
s h a l l be p a i d i n c a s h b y [ P I R ] 
t o [The 
M i t c h e l l Company] on o r b e f o r e A p r i l 15, 1997, and 
Ken 
C h r i s t i a n 
h e r e b y 
p e r s o n a l l y 
g u a r a n t e e s 
t h e 
payment 
t h e r e o f . " 
Hughes 
r e c o g n i z e s t h a t 
t h e a b o v e - q u o t e d 
l a n g u a g e 
does n o t 
e x p l i c i t l y show an i n t e n t i o n by The M i t c h e l l Company and P I R 
t o i n s u l a t e t h e H u g h e s e s f r o m any d e f e n s e The M i t c h e l l Company 
14 
1060109, 1060201 
may 
have 
a s s e r t e d 
a g a i n s t 
P I R , 
b u t Hughes a r g u e s 
t h a t 
t h e 
f a i l u r e o f t h e p a r t i e s t o s p e c i f i c a l l y p r o v i d e f o r t h e 
r i g h t 
o f The 
M i t c h e l l Company t o r e c o v e r any payment due u n d e r 
t h e 
p u r c h a s e - p r i c e - a d j u s t m e n t c l a u s e f r o m t h e amount i t was t o p a y 
on t h e Hughes i n d e b t e d n e s s i s s u f f i c i e n t . 
Hughes d o e s 
n o t 
c i t e any 
l e g a l a u t h o r i t y 
t o s u p p o r t h e r 
c o n t e n t i o n . 
Hughes 
has 
f a i l e d 
t o 
p o i n t 
t o 
any 
l a n g u a g e 
i n 
t h e 
p u r c h a s e and s a l e a g r e e m e n t t h a t e v i d e n c e s an i n t e n t i o n o f The 
M i t c h e l l Company and PIR t o i n s u l a t e t h e H u g h e s e s , as 
t h i r d -
p a r t y 
b e n e f i c i a r i e s , f r o m any d e f e n s e s The 
M i t c h e l l Company 
may 
have a s s e r t e d 
a g a i n s t P I R . 
T h e r e 
i s no l a n g u a g e 
i n t h e 
p u r c h a s e 
and 
s a l e 
a g r e e m e n t 
t h a t 
e s t a b l i s h e s 
t h e 
p a r t i e s ' 
i n t e n t i o n t o i n s u l a t e t h i r d - p a r t y b e n e f i c i a r i e s f r o m d e f e n s e s 
a v a i l a b l e t o The 
M i t c h e l l Company a g a i n s t 
P I R . 
I n t h e same v e i n , Hughes a l s o a p p e a r s t o a r g u e 
t h a t 
t h e 
s t r u c t u r e 
o f 
t h e p u r c h a s e 
and 
s a l e 
a g r e e m e n t 
i n d i c a t e s 
an 
i n t e n t i o n 
o f t h e p a r t i e s 
t o 
i n s u l a t e 
t h e H u g h e s e s f r o m 
any 
d e f e n s e 
The 
M i t c h e l l Company may 
have 
a g a i n s t 
P I R , 
t h e r e b y 
t r i g g e r i n g t h e a p p l i c a t i o n o f t h e S c h n e i d e r e x c e p t i o n . 
Hughes 
a r g u e s 
t h a t 
" t h e 
d e t e r m i n a t i o n 
o f 
w h e t h e r 
[The 
M i t c h e l l 
Company] i s e n t i t l e d t o r e c o v e r an o v e r p a y m e n t 
i s b a s e d upon 
f a c t o r s 
r e l a t i n g t o t h e amount p a i d by [The M i t c h e l l Company] 
15 
1060109, 1060201 
t o 
PIR 
and 
C h r i s t i a n , 
n o t 
t h e 
t o t a l 
amount 
p a i d 
by 
[The 
M i t c h e l l 
Company]"; 
t h e r e f o r e , 
Hughes 
a r g u e s , 
" [ t ] h e 
c o n t r a c t u a l 
f a c t o r s 
c o n s i d e r e d 
i n 
d e t e r m i n i n g 
w h e t h e r 
an 
o v e r p a y m e n t 
has 
o c c u r r e d 
assumes 
t h a t 
t h e 
Hughes 
... 
o b l i g a t i o n 
[ i s ] i n d e p e n d e n t 
o f 
w h e t h e r 
an 
o v e r p a y m e n t 
has 
o c c u r r e d 
e n t i t l i n g 
[The 
M i t c h e l l 
Company] 
t o 
r e c o v e r 
any 
amount f r o m PIR 
( a n d / o r 
C h r i s t i a n ) . " 
Hughes a p p e a r s t o a r g u e 
t h a t b e c a u s e t h e d e t e r m i n a t i o n o f t h e a d j u s t e d p u r c h a s e 
p r i c e 
a l l e g e d l y 
d o e s 
n o t 
i n c l u d e 
a 
c o n s i d e r a t i o n o f 
t h e 
e n t i r e 
p u r c h a s e 
p r i c e 
o f 
$682,500 
( w h i c h 
i n c l u d e d 
t h e 
Hughes 
i n d e b t e d n e s s ) 
b u t o n l y what The M i t c h e l l Company d i r e c t l y p a i d 
t o PIR, t h e n t h e r e i s an i n h e r e n t a s s u m p t i o n t h a t The 
M i t c h e l l 
Company and 
PIR 
i n t e n d e d 
t o 
i n s u l a t e 
t h e H u g h e s e s f r o m 
any 
d e f e n s e 
The 
M i t c h e l l Company may 
have a s s e r t e d a g a i n s t 
PIR. 
Once a g a i n , o t h e r t h a n mere a l l e g a t i o n s and 
a s s u m p t i o n s , 
Hughes f a i l s t o p o i n t t o any l a n g u a g e i n t h e p u r c h a s e and s a l e 
a g r e e m e n t t h a t e v i d e n c e s 
an i n t e n t i o n o f The 
M i t c h e l l Company 
and 
PIR 
t o 
i n s u l a t e 
t h e 
H u g h e s e s 
f r o m 
any 
d e f e n s e s 
The 
M i t c h e l l 
Company may 
h a v e 
a s s e r t e d 
a g a i n s t 
PIR 
and, 
t h u s , 
f a i l s 
t o 
show 
t h a t 
t h e 
S c h n e i d e r 
e x c e p t i o n 
s h o u l d 
a p p l y . 
T h e r e f o r e , 
we 
a f f i r m 
t h e 
c i r c u i t 
c o u r t ' s j u d g m e n t 
t h a t 
any 
c l a i m 
b r o u g h t 
a g a i n s t 
The 
M i t c h e l l Company by 
Hughes 
as 
a 
16 
1060109, 1060201 
t h i r d - p a r t y b e n e f i c i a r y o f t h e 
c o n t r a c t b e t w e e n The 
M i t c h e l l 
Company and 
PIR 
i s s u b j e c t 
t o t h e same d e f e n s e s The 
M i t c h e l l 
Company w o u l d h a v e a g a i n s t 
PIR 
i f i t b r o u g h t a c l a i m b a s e d 
on 
s u c h o b l i g a t i o n s . 
Hughes n e x t a r g u e s 
t h a t e v e n 
i f t h i s 
C o u r t 
d e c l i n e s 
t o 
a p p l y 
t h e 
S c h n e i d e r e x c e p t i o n , 
The 
M i t c h e l l Company's o f f s e t 
d e f e n s e 
i s 
" b a r r e d 
i n w h o l e 
o r 
i n p a r t 
by 
t h e 
d o c t r i n e 
o f 
e q u i t a b l e 
e s t o p p e l . " 
(Hughes's b r i e f , 
a t 
52.) 
"'"An 
e s t o p p e l 
... 
has 
t h r e e i m p o r t a n t e l e m e n t s . 
The 
a c t o r , 
who 
u s u a l l y must h a v e k n o w l e d g e o f 
t h e 
t r u e 
f a c t s , c o m m u n i c a t e s s o m e t h i n g 
i n a m i s l e a d i n g 
way, 
e i t h e r 
by 
w o r d s , 
c o n d u c t 
o r 
s i l e n c e . 
The 
o t h e r 
r e l i e s upon t h a t c o m m u n i c a t i o n . And 
t h e 
o t h e r 
w o u l d 
be harmed m a t e r i a l l y i f t h e a c t o r i s l a t e r 
p e r m i t t e d 
t o 
a s s e r t 
any 
c l a i m 
i n c o n s i s t e n t 
w i t h 
h i s 
e a r l i e r 
c o n d u c t . " ' " 
P i e r c e v. Hand, A r e n d a l l , B e d s o l e , G r e a v e s & J o h n s t o n , 678 
So. 
2d 765, 
768 
( A l a . 1996) 
( q u o t i n g M a z e r v. J a c k s o n I n s . A g e n c y , 
340 
So. 
2d 
770, 
773 
( A l a . 
1 
97 6 ) , 
q u o t i n g 
i n 
t u r n 
Dobbs, 
R e m e d i e s 
§ 
2.3 
( 1 9 7 3 ) ) . 
Hughes 
a r g u e s 
t h a t 
The 
M i t c h e l l 
Company had k n o w l e d g e o f t h e H u g h e s e s ' i n t e r e s t i n t h e 
s u b j e c t 
m a t t e r 
o f 
The 
M i t c h e l l Company's a c t i o n 
a g a i n s t 
PIR 
i n 
t h a t 
s h a r e s 
o f 
t h e 
s t o c k 
o f 
PIR 
w e r e p l e g e d 
as 
s e c u r i t y f o r 
t h e 
Hughes 
i n d e b t e d n e s s . 
Hughes 
a r g u e s 
t h a t 
The 
M i t c h e l l 
Company's f a i l u r e t o n o t i f y t h e H u g h e s e s o f i t s a c t i o n 
a g a i n s t 
17 
1060109, 1060201 
PIR 
was 
m i s l e a d i n g 
and t h a t i t c a u s e d harm t o t h e H u g h e s e s 
b e c a u s e i t d i d n o t a l l o w t h e H u g h e s e s t h e a b i l i t y t o p r o t e c t 
t h e i r 
" r i g h t t o r e c e i v e 
f u t u r e p a y m e n t s f r o m 
[ t h e ] M i t c h e l l 
[Company] on t h e Hughes 
i n d e b t e d n e s s . " 
( H u g h e s ' s b r i e f , a t 
54.) 
Hughes p o i n t s t o no e v i d e n c e i n t h e r e c o r d t o show 
t h a t 
she 
r e a s o n a b l y 
r e l i e d 
on The 
M i t c h e l l Company's 
f a i l u r e t o 
n o t i f y t h e H u g h e s e s o f i t s a c t i o n 
a g a i n s t 
P I R and how 
t h a t 
r e a s o n a b l e 
r e l i a n c e 
c a u s e d 
Hughes 
m a t e r i a l 
harm. 
U n d i s p u t e d l y , 
The M i t c h e l l Company s e n t n o t i c e t o t h e H u g h e s e s 
t h a t i t 
h a d t a k e n o v e r t h e management o f P I R and t h a t i t w o u l d 
be s e r v i c i n g t h e Hughes i n d e b t e d n e s s . 
However, n o t h i n g i n The 
M i t c h e l l Company's l e t t e r n o t i f y i n g t h e H u g h e s e s o f t h e c h a n g e 
i n management i n d i c a t e d 
t h a t 
C h r i s t i a n and G r a d d i c k h a d b e e n 
r e l e a s e d 
f r o m 
l i a b i l i t y 
on 
t h e Hughes 
i n d e b t e d n e s s , 
and 
C h r i s t i a n 
and 
G r a d d i c k 
r e m a i n 
p e r s o n a l l y 
l i a b l e 
t o 
t h e 
H u g h e s e s . 
The M i t c h e l l Company's a b i l i t y t o o f f s e t t h e Hughes 
i n d e b t e d n e s s b y t h e amount o f i t s u n p a i d j u d g m e n t a g a i n s t P I R 
d o e s 
n o t 
a f f e c t 
Hughes's 
r i g h t 
t o 
r e c o v e r 
t h e 
Hughes 
i n d e b t e d n e s s 
and c a u s e s 
no 
m a t e r i a l 
harm 
t o Hughes. 
The 
c i r c u i t c o u r t p r o p e r l y g r a n t e d The M i t c h e l l Company t h e r i g h t 
t o 
o f f s e t . 
18 
1060109, 1060201 
As c r o s s - a p p e l l a n t , The M i t c h e l l Company a r g u e s t h a t t h e 
c i r c u i t 
c o u r t e r r e d i n f i n d i n g t h a t i t s p r e p a y m e n t t o PIR o f 
t h e 
p u r c h a s e n o t e r e s u l t e d i n a p a r t i a l w a i v e r o f The 
M i t c h e l l 
Company's 
r i g h t 
o f 
o f f s e t 
a g a i n s t 
t h e Hughes i n d e b t e d n e s s . 
The 
c i r c u i t 
c o u r t h e l d , i n p e r t i n e n t p a r t , as 
f o l l o w s : 
" [ H u g h e s ' s ] a r g u m e n t u n d e r i t s ' p a r t i a l w a i v e r ' 
t h e o r y i s t h a t t h e c o n t e m p l a t i o n o f t h e P u r c h a s e 
and 
S a l e A g r e e m e n t was 
t h a t 
a t t h e 
t i m e 
t h e 
P u r c h a s e 
P r i c e A d j u s t m e n t was 
t o be c a l c u l a t e d , a b a l a n c e o f 
$75,000 p l u s 
i n t e r e s t a c c r u i n g a t 7% f r o m S e p t e m b e r 
9, 
1996 
w o u l d 
t h e n 
s t i l l 
be owed by 
[The 
M i t c h e l l 
Company] 
u n d e r 
t h e 
P u r c h a s e 
N o t e , 
and 
t h a t 
any 
P u r c h a s e P r i c e A d j u s t m e n t due 
[The M i t c h e l l Company] 
w o u l d 
f i r s t 
be 
s e t o f f 
a g a i n s t 
t h a t 
u n p a i d b a l a n c e 
b e f o r e b e i n g a s s e r t e d as a s e t o f f 
a g a i n s t p a y m e n t s 
on 
t h e Hughes 
i n d e b t e d n e s s . 
[Hughes] 
a r g u e s 
t h a t 
when 
[The 
M i t c h e l l Company] 
e l e c t e d 
t o p r e p a y 
t h e 
P u r c h a s e 
N o t e 
a t 
a d i s c o u n t p r i c e 
o f 
$50,000 
i n 
J u n e , 1996, b e f o r e any payment on t h e P u r c h a s e 
N o t e 
came 
due, 
[The 
M i t c h e l l 
Company] 
f r u s t r a t e d 
t h e 
p u r p o s e 
f o r w h i c h 
t h e P u r c h a s e N o t e 
was 
i n t e n d e d , 
w h i c h 
was 
t o 
p r o v i d e 
t h e 
p r i m a r y 
v e h i c l e 
f o r 
e f f e c t i n g 
a r e d u c t i o n 
i n t h e p u r c h a s e 
p r i c e . 
[The 
M i t c h e l l Company] has a t a l l 
t i m e s c o n c e d e d t h a t b u t 
f o r 
t h e 
r i g h t 
t o 
o f f s e t 
a g a i n s t 
payment 
o f 
t h e 
Hughes 
i n d e b t e d n e s s i n o r d e r t o 
r e a l i z e 
upon 
t h e 
P u r c h a s e 
P r i c e A d j u s t m e n t , 
i t w o u l d h a v e c o n t i n u e d 
t o 
p a y t h e i n s t a l l m e n t s o f t h e Hughes i n d e b t e d n e s s 
as t h e y 
f e l l 
due. 
The 
r e c o r d 
a l s o 
e s t a b l i s h e s 
t h a t 
[The 
M i t c h e l l 
Company] u n d e r s t o o d 
a t t h e 
t i m e i t 
a g r e e d 
t o 
p a y 
o f f t h e 
P u r c h a s e 
N o t e 
e a r l y 
a t 
a 
d i s c o u n t 
t h a t 
i t was 
i n e f f e c t 
g i v i n g 
up 
s e c u r i t y 
f o r 
e f f e c t i n g any P u r c h a s e P r i c e A d j u s t m e n t i t m i g h t 
l a t e r be d e t e r m i n e d t o be 
e n t i t l e d t o . As a r g u e d by 
[ H u g h e s ] , w a i v e r o c c u r s when a p a r t y i n p o s s e s s i o n 
o f 
a 
r i g h t , 
w h e t h e r 
a r i s i n g 
o u t 
o f 
l a w 
o r 
a 
c o n t r a c t , w i t h 
f u l l k n o w l e d g e 
o f t h e m a t e r i a l 
f a c t s , 
p e r f o r m s a c t s w h i c h a r e i n c o n s i s t e n t w i t h t h e 
r i g h t 
19 
1060109, 1060201 
o r i t s i n t e n t i o n t o r e l y on t h a t 
r i g h t . 
Dominex, 
 
I n c . v. K e y , 456 So. 2d 1047 ( A l a . 1 9 8 4 ) ; B a s s e t t v .  
Newton, 658 So. 2d 398 ( A l a . 1 9 9 5 ) . " 
The 
M i t c h e l l Company a r g u e s t h a t t h e r e i s no e v i d e n c e i n 
t h e 
r e c o r d s u p p o r t i n g t h e c i r c u i t c o u r t ' s f i n d i n g t h a t , by p a y i n g 
t h e r e m a i n i n g b a l a n c e o f t h e p u r c h a s e n o t e e a r l y , The M i t c h e l l 
Company w a i v e d i t s r i g h t t o o f f s e t t h e r e m a i n i n g b a l a n c e o f 
t h e p u r c h a s e n o t e . 
C o n t r a r y t o The M i t c h e l l Company's c l a i m , 
t h e r e i s ample 
e v i d e n c e 
s h o w i n g 
t h a t The 
M i t c h e l l 
Company 
w a i v e d i t s r i g h t t o o f f s e t . 
" ' W a i v e r i s d e f i n e d as t h e v o l u n t a r y s u r r e n d e r 
o r r e l i n q u i s h m e n t o f some known r i g h t , 
b e n e f i t , o r 
a d v a n t a g e . 
C i t y o f M o n t g o m e r y v. W e l d o n , 280 
A l a . 
4 
63, 
1 
95 So. 2d 110 
(1 
967 
) . However, i t i s w e l l 
e s t a b l i s h e d 
t h a t 
a p a r t y ' s 
i n t e n t i o n 
t o w a i v e 
a 
r i g h t i s t o be a s c e r t a i n e d 
f r o m t h e e x t e r n a l 
a c t s 
m a n i f e s t i n g 
t h e w a i v e r . 
G i v e n s v. G e n e r a l 
M o t o r s 
 
A c c e p t a n c e C o r p . , 56 A l a . App. 5 6 1 , 324 So. 2d 277 
( 1 9 7 5 ) . T h i s i n t e n t i o n t o w a i v e a r i g h t may be f o u n d 
where one's c o u r s e o f c o n d u c t i n d i c a t e s t h e same o r 
i s 
i n c o n s i s t e n t w i t h any o t h e r 
i n t e n t i o n . ' " 
S t e w a r t v . B r a d l e y , 15 So. 3d 533, 543 ( A l a . C i v . 
App. 2008) 
( q u o t i n g W a t e r s v . T a y l o r , 527 So. 2d 139, 141 ( A l a . C i v . App. 
1 9 8 8 ) ) . 
I t 
i s c l e a r 
f r o m 
t h e f a c e o f t h e p u r c h a s e 
and 
s a l e 
a g r e e m e n t and f r o m t h e d e p o s i t i o n 
t e s t i m o n y o f P a u l Wesch, 
g e n e r a l 
c o u n s e l f o r The M i t c h e l l Company, 
t h a t t h e b a l a n c e 
r e m a i n i n g on t h e p u r c h a s e n o t e as o f M a r c h 3 1 , 1997, was t o be 
20 
1060109, 1060201 
r e c a l c u l a t e d , 
t a k i n g 
i n t o 
a c c o u n t 
t h e 
p u r c h a s e - p r i c e 
a d j u s t m e n t . 
The 
p u r c h a s e 
and 
s a l e 
a g r e e m e n t 
s t a t e s 
t h a t 
" [ a ] l l r e m a i n i n g p r i n c i p a l and 
i n t e r e s t on t h e P u r c h a s e 
N o t e 
s h a l l be due on M a r c h 31, 1997 
( s u b j e c t t o t h e P u r c h a s e 
P r i c e 
A d j u s t m e n t 
d e s c r i b e d b e l o w ) . " 
The p u r c h a s e - p r i c e - a d j u s t m e n t 
c l a u s e 
s t a t e s : 
"The 
P u r c h a s e P r i c e 
s h a l l be i n c r e a s e d o r d e c r e a s e d 
on and as o f M a r c h 31, 1997 
i n a c c o r d a n c e w i t h 
t h i s 
P a r a g r a p h 3 ( c ) ( t h e ' P u r c h a s e P r i c e A d j u s t m e n t ' ) 
and 
t h e r e m a i n i n g p r i n c i p a l b a l a n c e o f t h e P u r c h a s e N o t e 
on 
t h a t 
d a t e 
s h a l l 
be 
i n c r e a s e d 
o r 
d e c r e a s e d 
t o 
r e f l e c t 
t h e P u r c h a s e 
P r i c e 
A d j u s t m e n t . 
I f , d u r i n g 
t h e 
p e r i o d 
commencing 
M a r c h 
31, 
1996 
and 
e n d i n g 
M a r c h 
31, 
1997 
( t h e 
' A d j u s t m e n t 
P e r i o d ' ) , 
g r o s s 
r e n t a l c o m m i s s i o n i n c o m e ( b u t e x c l u d i n g h o u s e k e e p i n g 
and 
m a i n t e n a n c e 
f e e 
i n c o m e ) 
a c t u a l l y 
r e c e i v e d 
by 
[The M i t c h e l l Company] f r o m t h e C o n t r a c t s and F u t u r e 
C o n t r a c t s 
i s l e s s 
( o r more) t h a n $ 2 8 9 , 0 9 8 . 0 0 , 
t h e 
P u r c h a s e P r i c e s h a l l be r e d u c e d ( o r i n c r e a s e d ) $2.36 
f o r 
e a c h 
$1.00 
o f 
s h o r t f a l l 
( o r o v e r a g e ) 
and 
t h e 
amount 
t h e n 
due 
on 
t h e 
P u r c h a s e 
N o t e , 
i n c l u d i n g 
b e g i n n i n g p r i n c i p a l and i n t e r e s t f r o m M a r c h 3 1 , 
1996 
on s u c h new 
p r i n c i p a l amount, s h a l l be 
r e c a l c u l a t e d 
and p a i d . The P u r c h a s e P r i c e A d j u s t m e n t r e d u c t i o n o r 
i n c r e a s e , 
i f any, 
s h a l l 
n o t be 
l i m i t e d 
i n amount. 
Any P u r c h a s e P r i c e A d j u s t m e n t d e c r e a s e i n e x c e s s o f 
t h e amount o f p r i n c i p a l 
r e m a i n i n g u n p a i d u n d e r 
t h e 
P u r c h a s e N o t e 
s h a l l be p a i d i n c a s h by [PIR] t o 
[The 
M i t c h e l l Company] on o r b e f o r e A p r i l 
15, 1997, 
and 
Ken 
C h r i s t i a n 
h e r e b y 
p e r s o n a l l y 
g u a r a n t e e s 
t h e 
payment 
t h e r e o f . " 
As e v i d e n c e d by t h e a b o v e - q u o t e d 
l a n g u a g e o f t h e p u r c h a s e 
and 
s a l e a g r e e m e n t , 
t h e b a l a n c e due on t h e p u r c h a s e n o t e was t o be 
r e c a l c u l a t e d , 
a p p l y i n g 
t h e p u r c h a s e - p r i c e - a d j u s t m e n t , w h i c h 
21 
1060109, 1060201 
c a l c u l a t i o n was t o o c c u r on M a r c h 3 1 , 1997. 
As e v i d e n c e o f 
The M i t c h e l l Company's k n o w l e d g e o f t h a t f a c t , Wesch 
t e s t i f i e d 
as f o l l o w s : 
" W e l l , t h e p u r c h a s e p r i c e a d j u s t m e n t i s r e f e r r e d 
t o i n t h i s p a r a g r a p h . A n d , i n summary, i t s a y s you 
o f f s e t 
o r d e c r e a s e 
t h e p r i c e 
f i r s t 
a g a i n s t 
t h e 
p u r c h a s e n o t e , t h e h u n d r e d t h o u s a n d d o l l a r n o t e 
t h a t 
we were t a l k i n g 
a b o u t . 
f l 
"And t h e n i t 
s a y s t h e p u r c h a s e p r i c e a d j u s t m e n t 
r e d u c t i o n 
o r 
i n c r e a s e 
s h a l l 
n o t be 
l i m i t e d 
i n 
amount." 
The 
M i t c h e l l 
Company 
e n t e r e d 
i n t o 
t h e p u r c h a s e 
and 
s a l e 
a g r e e m e n t w i t h t h e u n d e r s t a n d i n g t h a t t h e b a l a n c e due on t h e 
p u r c h a s e 
n o t e as o f M a r c h 3 1 , 1997, was t o be u s e d as an 
o f f s e t t o a p o s s i b l e i n c r e a s e o f t h e p u r c h a s e p r i c e u n d e r t h e 
p u r c h a s e - p r i c e - a d j u s t m e n t 
c l a u s e . 
W i t h 
t h a t k n o w l e d g e , The 
M i t c h e l l 
Company, when 
i t p a i d 
t h e p u r c h a s e 
n o t e 
e a r l y , 
v o l u n t a r i l y 
r e l i n q u i s h e d t h e r i g h t t o o f f s e t t h e b a l a n c e o f 
t h e 
p u r c h a s e 
n o t e 
a g a i n s t 
a p o s s i b l e 
i n c r e a s e 
i n p u r c h a s e 
p r i c e u n d e r t h e p u r c h a s e - p r i c e - a d j u s t m e n t c l a u s e . 
T h e r e f o r e , 
t h e 
c i r c u i t 
c o u r t d i d n o t e r r i n f i n d i n g t h a t The 
M i t c h e l l 
Company h a d p a r t i a l l y 
w a i v e d 
i t s r i g h t 
t o o f f s e t t h e P I R 
j u d g m e n t . 
22 
1060109, 1060201 
H a v i n g d e t e r m i n e d 
t h a t 
t h e 
c i r c u i t 
c o u r t 
p r o p e r l y 
h e l d 
t h a t 
The 
M i t c h e l l Company has 
t h e 
r i g h t 
t o a p p l y 
t h e 
u n p a i d 
b a l a n c e 
o f 
i t s j u d g m e n t 
a g a i n s t 
PIR, 
m i n u s 
t h e 
p o r t i o n 
i t 
w a i v e d , as an 
o f f s e t 
a g a i n s t 
i t s o b l i g a t i o n u n d e r t h e Hughes 
i n d e b t e d n e s s , 
we 
now 
c o n s i d e r 
w h e t h e r 
t h e 
c i r c u i t 
c o u r t 
p r o p e r l y d e t e r m i n e d t h a t Hughes was 
b a r r e d by t h e d o c t r i n e 
o f 
j u d i c i a l e s t o p p e l f r o m c l a i m i n g more t h a n a o n e - h a l f 
i n t e r e s t 
i n t h e Hughes i n d e b t e d n e s s . 
The 
d o c t r i n e o f j u d i c i a l 
e s t o p p e l 
e x i s t s 
t o 
" ' p r o t e c t [ ] 
t h e 
i n t e g r i t y 
o f 
t h e 
j u d i c i a l 
s y s t e m , 
n o t 
t h e 
l i t i g a n t s . ' " 
Ex p a r t e 
F i r s t A l a b a m a Bank, 883 
So. 
2d 
1236, 
1243 
( A l a . 2003) 
( q u o t i n g 
B u r n e s 
v. 
Pemco 
A e r o p l e x , 
I n c . , 
291 
F.3d 
1282, 
1286 
( 1 1 t h 
C i r . 
2 0 0 2 ) ) . 
I n 
F i r s t 
A l a b a m a , t h i s C o u r t 
h e l d : 
"The 
U n i t e d 
S t a t e s 
Supreme 
C o u r t 
i n 
New 
 
H a m p s h i r e v. M a i n e , 532 
U.S. 
742, 
121 
S. 
C t . 
1808, 
149 
L. 
Ed. 
2d 
968 
(2001 ), 
r e c e n t l y o b s e r v e d 
t h a t 
' " [ t ] h e c i r c u m s t a n c e s 
u n d e r w h i c h j u d i c i a l 
e s t o p p e l 
may 
a p p r o p r i a t e l y 
be 
i n v o k e d 
a r e 
p r o b a b l y 
n o t 
r e d u c i b l e t o any 
g e n e r a l 
f o r m u l a t i o n 
o f 
p r i n c i p l e " ' 
and 
t h e n 
i d e n t i f i e d 
s e v e r a l 
f a c t o r s as 
i n f o r m a t i v e 
i n d e t e r m i n i n g 
t h e 
a p p l i c a b i l i t y o f t h e d o c t r i n e 
o f 
j u d i c i a l 
e s t o p p e l . 
532 
U.S. 
a t 
7 5 0 - 5 1 , 
121 
S.Ct. 
1 80 8 
( q u o t i n g 
A l l e n 
v. 
Z u r i c h 
I n s . 
Co., 
667 
F.2d 
1162, 
1166 
( 4 t h C i r . 1 9 8 2 ) ) . 
The 
C o u r t h e l d t h a t f o r 
j u d i c i a l 
e s t o p p e l 
t o 
a p p l y 
(1) 
'a 
p a r t y ' s 
l a t e r 
p o s i t i o n 
must 
be 
" c l e a r l y 
i n c o n s i s t e n t " w i t h 
i t s 
e a r l i e r 
p o s i t i o n ' ; 
(2) 
t h e 
p a r t y 
must 
h a v e 
b e e n 
s u c c e s s f u l i n t h e p r i o r p r o c e e d i n g 
so t h a t 
' j u d i c i a l 
a c c e p t a n c e 
o f 
an 
i n c o n s i s t e n t p o s i t i o n 
i n a 
l a t e r 
p r o c e e d i n g 
w o u l d c r e a t e 
" t h e p e r c e p t i o n 
t h a t 
e i t h e r 
23 
1060109, 1060201 
t h e 
f i r s t 
o r s e c o n d 
c o u r t 
was 
m i s l e d " ' 
( q u o t i n g 
E d w a r d s v . A e t n a 
L i f e 
I n s . Co., 690 F.2d 595, 599 
( 6 t h 
C i r . 1 
9 8 2 ) ) ; 
and 
(3) t h e p a r t y 
s e e k i n g 
t o 
a s s e r t 
an 
i n c o n s i s t e n t 
p o s i t i o n must 
' d e r i v e 
an 
u n f a i r 
a d v a n t a g e o r i m p o s e an u n f a i r d e t r i m e n t 
on 
t h e 
o p p o s i n g 
p a r t y 
i f n o t e s t o p p e d . ' 
532 U.S. 
a t 
7 5 0 - 5 1 , 121 S . C t . 1808." 
883 So. 2d a t 1 2 4 4 - 4 5 . 
I n t h e p r e s e n t 
c a s e , 
t h e c i r c u i t 
c o u r t 
d e t e r m i n e d 
t h a t 
Hughes was b a r r e d by t h e d o c t r i n e o f j u d i c i a l 
e s t o p p e l 
f r o m 
c l a i m i n g more t h a n o n e - h a l f o f t h e Hughes i n d e b t e d n e s s b e c a u s e 
C h a r l e s Hughes h a d s u c c e s s f u l l y c l a i m e d a o n e - h a l f 
i n t e r e s t i n 
t h e Hughes i n d e b t e d n e s s i n h i s 1997 b a n k r u p t c y 
p r o c e e d i n g s . 
The 
c i r c u i t 
c o u r t 
r e a s o n e d 
t h a t 
a l l o w i n g Hughes t o c l a i m a 
f u l l 
i n t e r e s t i n t h e Hughes i n d e b t e d n e s s i n t h e p r e s e n t 
c a s e 
w o u l d be 
" c l e a r l y 
i n c o n s i s t e n t " w i t h 
t h e p o s i t i o n 
C h a r l e s 
Hughes 
t o o k 
i n t h e 
1997 
b a n k r u p t c y 
p r o c e e d i n g , 
t h e r e b y 
c r e a t i n g " t h e p e r c e p t i o n t h a t e i t h e r t h e f i r s t o r s e c o n d c o u r t 
was 
m i s l e d . " 
The 
c i r c u i t 
c o u r t 
h e l d 
t h a t Hughes g a i n e d 
an 
u n f a i r a d v a n t a g e f r o m t h e i n c o n s i s t e n t p o s i t i o n s a n d , t h u s , i s 
now b a r r e d by t h e d o c t r i n e o f j u d i c i a l e s t o p p e l f r o m c l a i m i n g 
more t h a n a o n e - h a l f 
i n t e r e s t . 
We 
d i s a g r e e . 
As o b s e r v e d 
a b o v e , 
t h e r e 
i s no g e n e r a l 
f o r m u l a t i o n o f 
p r i n c i p l e 
d i c t a t i n g when t h e d o c t r i n e o f 
j u d i c i a l 
e s t o p p e l 
a p p l i e s ; 
s u c h a d e c i s i o n i s l e f t t o t h e c o u r t ' s 
d i s c r e t i o n , 
24 
1060109, 1060201 
e n l i g h t e n e d 
b y 
s e v e r a l 
i n f o r m a t i v e 
f a c t o r s 
g l e a n e d 
f r o m 
p r e c e d e n t o f t h i s C o u r t and t h e U n i t e d S t a t e s Supreme C o u r t i n 
t h e 
l a n d m a r k c a s e o f New 
H a m p s h i r e v. M a i n e , 532 U.S. 
742 
( 2 0 0 1 ) . 
G i v e n t h e s p e c i f i c c i r c u m s t a n c e s 
o f t h e p r e s e n t 
c a s e , 
i t 
i s c l e a r 
t h a t 
Hughes has n o t a s s e r t e d 
an 
i n c o n s i s t e n t 
p o s i t i o n i n o r d e r t o g a i n an u n f a i r a d v a n t a g e ; she i s m e r e l y 
a s s e r t i n g a p o s i t i o n c o n s i s t e n t w i t h t h e j u d g m e n t i n Hughes I . 
I n s t e a d , 
i t a p p e a r s 
t h a t The 
M i t c h e l l Company i s t h e p a r t y 
a t t e m p t i n g 
t o 
g a i n 
an 
u n f a i r 
a d v a n t a g e 
by 
a s s e r t i n g 
i n c o n s i s t e n t 
p o s i t i o n s . 
I n Hughes I , The 
M i t c h e l l 
Company 
s u c c e s s f u l l y 
a r g u e d 
t h a t C o n n i e Hughes h a d no c l a i m t o t h e 
Hughes i n d e b t e d n e s s , 
l e a v i n g Hughes e n t i t l e d t o t h e e n t i r e t y 
o f t h e Hughes i n d e b t e d n e s s . 
Now, 
h a v i n g 
s u c c e s s f u l l y a r g u e d 
i n 
Hughes 
I t h a t Hughes was 
t h e s o l e p a y e e on t h e Hughes 
i n d e b t e d n e s s , 
The M i t c h e l l Company r e v e r s e s c o u r s e and a r g u e s 
t h a t , b e c a u s e o f a b a n k r u p t c y p r o c e e d i n g 
t h a t o c c u r r e d 
b e f o r e 
t h e 
c i r c u i t 
c o u r t 
d e c i d e d 
Hughes I , Hughes i s b a r r e d b y t h e 
d o c t r i n e o f j u d i c i a l e s t o p p e l f r o m c l a i m i n g more t h a n 
o n e - h a l f 
o f 
t h e Hughes 
i n d e b t e d n e s s . 
Such 
p o s i t i o n s 
a r e 
c l e a r l y 
i n c o n s i s t e n t 
and 
a s s e r t e d 
t o 
g a i n 
an 
u n f a i r 
a d v a n t a g e . 
A l l o w i n g t h e c i r c u i t 
c o u r t ' s j u d g m e n t t o s t a n d w o u l d c r e a t e a 
25 
1060109, 1060201 
w i n d f a l l f o r The M i t c h e l l Company a m o u n t i n g t o h a l f t h e p a s t -
due 
i n s t a l l m e n t s o f t h e Hughes n o t e . 
F u r t h e r , we h o l d t h a t t h e d o c t r i n e o f r e s j u d i c a t a 
b a r s 
The M i t c h e l l Company f r o m a r g u i n g t h a t Hughes i s e n t i t l e d t o 
any 
i n t e r e s t 
l e s s 
t h a n 
t h e e n t i r e 
i n t e r e s t 
i n t h e Hughes 
i n d e b t e d n e s s . 
I n J o h n H a n c o c k M u t u a l 
L i f e 
I n s u r a n c e Co. v. L a r g e , 230 
A l a . 621, 624, 162 So. 277, 279 ( 1 9 3 5 ) , t h i s C o u r t 
h e l d : 
"The g e n e r a l r u l e 
t h a t 
s u i t c a n be b r o u g h t t o 
r e c o v e r 
o n l y demands 
a l r e a d y a c c r u e d i s n o t t o be 
q u e s t i o n e d . 
" I n a s u i t upon p a s t - d u e i n s t a l l m e n t s , due u n d e r 
one 
and t h e same 
c o n t r a c t , t h e g e n e r a l 
w e l l - k n o w n 
r u l e a t l a w i s t h a t p r e s e n t r e c o v e r y i s l i m i t e d t o 
p a s t - d u e 
i n s t a l l m e n t s a t t h e t i m e o f s u i t 
f i l e d , b u t 
t h e j u d g m e n t i s p l e a d a b l e as r e s a d j u d i c a t a o f t h e 
o r i g i n a l 
o b l i g a t i o n , 
and 
i n 
s u i t s 
f o r 
l a t e r 
i n s t a l l m e n t s 
d e f e n s e s 
a r e 
l i m i t e d 
t o 
s u b s e q u e n t 
m a t t e r s 
g o i n g 
t o t h e c o n t i n u e d 
e x i s t e n c e o f t h e 
o b l i g a t i o n t o p a y t h e i n s t a l l m e n t s t h e n i n s u i t . " 
I n 
Hughes 
I , 
C o n n i e 
Hughes 
a r g u e d , 
c o n s i s t e n t 
w i t h 
C h a r l e s H u g h e s ' s p o s i t i o n i n h i s 1997 b a n k r u p t c y p r o c e e d i n g , 
t h a t she h e l d t h e Hughes i n d e b t e d n e s s 
j o i n t l y 
w i t h C h a r l e s 
Hughes. 
The M i t c h e l l Company a r g u e d t h a t C o n n i e Hughes h a d no 
c l a i m t o t h e Hughes i n d e b t e d n e s s and t h u s moved t o h a v e h e r 
d i s m i s s e d f r o m t h e c a s e . 
The 
c i r c u i t 
c o u r t a g r e e d w i t h The 
M i t c h e l l Company and o r d e r e d t h a t t h e f u l l amount o f t h e p a s t -
26 
1060109, 1060201 
due 
i n s t a l l m e n t s be 
p a i d 
t o t h e e s t a t e 
o f C h a r l e s 
Hughes 
a l o n e . 
I n t h e p r e s e n t 
a c t i o n , c o n s i s t e n t w i t h t h e j u d g m e n t i n 
Hughes 
I , 
Hughes 
c l a i m s 
t h e 
e n t i r e t y 
o f 
t h e 
Hughes 
i n d e b t e d n e s s . 
U n d e r J o h n H a n c o c k , t h e j u d g m e n t i n Hughes I i s p l e a d a b l e 
i n 
t h e 
p r e s e n t 
a c t i o n 
as 
r e s 
j u d i c a t a 
o f 
t h e 
o r i g i n a l 
o b l i g a t i o n . 
The M i t c h e l l Company may 
r a i s e o n l y 
" s u b s e q u e n t 
m a t t e r s " 
as a d e f e n s e t o p a y i n g 
i t s o b l i g a t i o n . 
The 
1997 
b a n k r u p t c y p r o c e e d i n g i s n o t a s u b s e q u e n t m a t t e r ; 
t h u s , i t may 
n o t be p l e a d e d 
as a d e f e n s e . 
The d o c t r i n e o f r e s j u d i c a t a 
b a r s 
The 
M i t c h e l l Company f r o m 
a r g u i n g 
t h a t Hughes i s n o t 
e n t i t l e d 
t o t h e e n t i r e t y 
o f t h e Hughes 
i n d e b t e d n e s s . 
The 
c i r c u i t 
c o u r t ' s j u d g m e n t r e g a r d i n g 
t h i s 
i s s u e i s r e v e r s e d . 
C o n c l u s i o n 
B a s e d on t h e f o r e g o i n g , 
t h i s 
C o u r t 
a f f i r m s i n p a r t and 
r e v e r s e s 
i n p a r t 
t h e summary 
j u d g m e n t 
e n t e r e d 
i n c a s e 
no. 
1060109, and we remand t h e c a s e f o r p r o c e e d i n g s 
c o n s i s t e n t 
w i t h 
t h i s 
o p i n i o n . 
As t h e c i r c u i t 
c o u r t h e l d , The 
M i t c h e l l 
Company i s e n t i t l e d t o a p p l y i t s 
u n p a i d j u d g m e n t a g a i n s t P I R , 
m i n u s t h e amount i t w a i v e d , as an o f f s e t 
a g a i n s t t h e Hughes 
i n d e b t e d n e s s . 
However, 
c o n t r a r y 
t o t h e 
c i r c u i t 
c o u r t ' s 
h o l d i n g , 
Hughes i s n o t b a r r e d 
by t h e d o c t r i n e o f 
j u d i c i a l 
27 
1060109, 1060201 
e s t o p p e l f r o m 
c l a i m i n g more t h a n a o n e - h a l f i n t e r e s t i n t h e 
Hughes i n d e b t e d n e s s . 
I n s t e a d , t h e d o c t r i n e o f r e s j u d i c a t a 
e s t a b l i s h e s 
t h a t , 
c o n s i s t e n t w i t h t h e j u d g m e n t i n Hughes I , 
Hughes 
i s e n t i t l e d 
t o 
c l a i m 
t h e 
e n t i r e t y 
o f t h e Hughes 
i n d e b t e d n e s s . 
F u r t h e r , 
t h i s 
C o u r t 
a f f i r m s 
t h e 
summary 
j u d g m e n t e n t e r e d i n c a s e no. 1 0 6 0 2 0 1 . 
1060109 
-- AFFIRMED 
IN PART; 
REVERSED 
IN PART; 
AND 
REMANDED. 
1060201 -- AFFIRMED. 
Cobb, C . J . , and L y o n s , 
W o o d a l l , 
S t u a r t , 
S m i t h , 
B o l i n , 
P a r k e r , and Shaw, J J . , c o n c u r . 
M u r d o c k , J . , c o n c u r s i n t h e r e s u l t . 
28