Opinion ID: 1782357
Heading Depth: 2
Heading Rank: 2

Heading: Summary Judgment on the Fraud Count

Text: The Fogartys, as previously noted, sought relief based on various claims stated in multiple counts in their complaint, one of which was devoted to fraud. We first address the summary judgment as to the fraud count. The Fogartys made their initial capital contribution to Confederate Money at some point in the fall of 1999. The Fogartys state that an inspection of the warranty deed from the McPherson Group to Confederate Money dated January 25, 2000, would have confirmed . . . that the property was deeded free and clear as it would not mention a prior mortgage. Confederate Money, Southworth, and McGill urge this Court to accept that the predicate act of fraud alleged by the Fogartys was the alleged misrepresentation that the McPherson Group would convey the land upon which the hotel was to be constructed to Confederate Money free and clear in exchange for a 51% ownership interest in Confederate Money. [2] Confederate Money, Southworth, and McGill assert various theories by which they contend that the Fogartys had notice sufficient to start the running of the two-year statutory period of limitations as to this alleged misrepresentation. We need not address the merits of any of these theories, however, including the theory that an examination of the public records in late 1999 would have revealed the existence of a prior mortgage, because the Fogartys face an insurmountable obstacle to reversal of the summary judgment on the fraud count arising from their failure to contest Confederate Money, Southworth, and McGill's contention in their brief to this Court that constructive notice of an alleged fraud can be furnished by public records. Confederate Money, Southworth, and McGill contended in the trial court, and do so in this Court, that they were entitled to a summary judgment because the constructive notice furnished by the public records started the running of the statutory limitations period with respect to the alleged misrepresentation that the conveyance of the property by the McPherson Group was free and clear. The Fogartys failed to address this constructive-notice issue at all in their initial brief, responding to it for the first time in their reply brief. Rule 28(a)(10), Ala. R.App. P., provides that an appellant's brief shall contain [a]n argument containing the contentions of the appellant/petitioner with respect to the issues presented, and the reasons therefor, with citations to the cases, statutes, other authorities, and parts of the record relied on. (Emphasis added.) It is true that constructive notice from public records that the property could not be conveyed free and clear was a basis the movants relied on in support of their motions for a summary judgment. When an appellant confronts an issue below that the appellee contends warrants a judgment in its favor and the trial court's order does not specify a basis for its ruling, the omission of any argument on appeal as to that issue in the appellant's principal brief constitutes a waiver with respect to the issue. If the rule were otherwise, an appellant could sandbag [3] an appellee by withholding an argument on an issue until the reply brief, thereby depriving the appellee of the opportunity to respond. See Lloyd Noland Hosp. v. Durham, 906 So.2d 157, 173 (Ala.2005) (It is a well-established principle of appellate review that we will not consider an issue not raised in an appellant's initial brief, but raised only in the reply brief.) (citing Birmingham Bd. of Educ. v. Boyd, 877 So.2d 592 (Ala.2003), and Sanders v. Smitherman, 776 So.2d 68, 73 (Ala.2000)). We therefore affirm the summary judgment on the fraud count insofar as it is based on the alleged misrepresentations concerning the conveyance of the property as free and clear, because the Fogartys have waived the right to assert error with respect to that issue. We have determined that the statute of limitations bars the predicate act of fraud, i.e., the misrepresentation that the property would be conveyed free and clear; the Fogartys next ask this Court to reverse the summary judgment insofar as it dismisses their claims relating to misrepresentations occurring after the predicate act of fraud. The subsequent misrepresentations include references to a December 19, 2000, Hotel Progress Memorandum; a March 15, 2001, Hotel Progress Memorandum; and a misrepresentation dealing with the percentage of their interest in Confederate Money dated April 17, 2002. The other fraudulent activities the Fogartys allege that occurred within two years of the filing of their action relate to allegations in the complaint having to do with the suppression of information from them. These instances and activities are merely summarized in the statement of facts in the Fogartys' principal brief to this Court and are supported only by citations to their complaint. The Fogartys attempt to bolster their misrepresentation allegations with two affidavits, one from Jane Fogarty and one from Charles Fogarty. Jane Fogarty's affidavit was attached to the Fogartys' response to the motion for summary judgment, but it did not specifically enumerate any instances of fraud or misrepresentation. Charles Fogarty's affidavit, on the other hand, was submitted after the May 14, 2004, hearing, when the trial court invited further briefs, and it dealt exclusively with the misrepresentations concerning the free and clear conveyance of the property, not misrepresentations occurring after the predicate act of fraud. Confederate Money, Southworth, and McGill moved to strike the affidavit on the grounds both that it exceeded the scope of the trial court's invitation and that it was not filed at least two days before the hearing as required by Rule 56(c)(2). The trial court never ruled on the motion to strike; we therefore assume that it considered the affidavit. See Hannah v. Gregg, Bland & Berry, Inc., 840 So.2d 839, 850 (Ala.2002) (holding that where there is no indication in the record that the court excluded [an untimely affidavit], we must assume that the trial court considered [it] when it ruled on [the] motion for a summary judgment) (citing Travis v. Ziter, 681 So.2d 1348, 1351 (Ala.1996)). Nevertheless, Charles Fogarty's affidavit deals only with the previously addressed bundle of misrepresentations concerning the McPherson Group's conveyance of the property as free and clear in exchange for a 51% interest in Confederate Money. It does not offer evidence of any misrepresentations allegedly occurring after that conveyance. Consequently, with respect to claims based upon misrepresentations occurring after this predicate act of fraud, the Fogartys have offered nothing in opposition to the motions for a summary judgment beyond the bare allegations of their complaint. Relying upon Rule 56(e), this Court has stated frequently that a nonmovant, in opposing a motion for a summary judgment, cannot merely rely on the allegations in the complaint. Ex parte Quinlan, 922 So.2d 914, 916 (Ala. 2005). Consequently, we cannot consider the effect, if any, of the misrepresentations occurring after what we have described as the predicate act, and the trial court's summary judgment as to the other aspects of the fraud count is therefore due to the affirmed.