Opinion ID: 2545615
Heading Depth: 1
Heading Rank: 10

Heading: Standing of Southdale

Text: In his cross-appeal, Strange urges us to affirm the summary judgment against Southdale based on lack of standing. [10] This action was initially commenced by Southdale, LLC, and others on May 28, 2004. An amended complaint was filed on August 20, 2004. The caption of the amended complaint again referred to Southdale, LLC, as a plaintiff but added the phrase, f/k/a Southdale, Inc. At paragraph 3 of the amended complaint, the following appears: 3. The plaintiff Southdale, LLC f/k/a Southdale, Inc. (`Southdale') is an Alabama limited liability corporation with its principal place of business in Montgomery, Alabama.1 1 On June 24, 2002 Southdale, Inc. was dissolved and on June 12, 2002 Southdale, LLC was formed and assumed all rights to pursue this action on behalf of Southdale Inc. as provided for by Ala.Code § 10-2B-14.05(6) (1975). There is no § 10-2B-14.05(6) in the Alabama Code 1975. Presumably, the reference is to § 10-2B-14.05(b)(6), which provides that the dissolution of a corporation does not [p]revent commencement of a proceeding by or against the corporation in its corporate name. However, because the action was never commenced in the name of Southdale, Inc., the dissolved entity, this Code section does not apply. Strange moved to dismiss the amended complaint and alleged: [Southdale] lack[s] standing to assert claims against Strange. [Southdale has] not alleged; or shown, that any of Strange's conduct caused them any injury. A subsequent memorandum in support of the motion to dismiss does not address the issue of standing. On July 11, 2006, Strange filed a motion for a summary judgment, challenging the standing of Southdale, LLC, to assert the claims contained in the complaint. In the motion Strange alleges that at the time of the commencement of the action, Southdale, Inc., had been dissolved and that Southdale, LLC, never owned the property that Southdale, Inc., the dissolved corporation, transferred to the City and the County pursuant to the option agreement. On October 2, 2007, after a hearing on Strange's motion on September 21, 2007, Southdale, LLC, supplemented the record by filing a document dated September 28, 2007, in which Southdale, Inc., transferred to Southdale, LLC, its assets, including any and all personal assets and choses in action arising out of any contract to sell and/or the sale of any real property by Southdale, Inc. At the same time, Southdale, LLC, filed an affidavit of Reese H. McKinney, Jr., in which he described himself as president of Southdale, Inc., at the time of its dissolution in 2002 and further stated that it was the purpose and intent of Southdale, Inc., to convey to Southdale, LLC, all of its undistributed assetsreal, personal, and mixedretaining nothing in the corporation. Southdale did not seek permission from the trial court to file these evidentiary submissions after the hearing on the summary-judgment motion. Strange and CSX filed motions to strike these additional evidentiary materials, citing as grounds for striking untimeliness, inconsistencies between the affidavit and the previous deposition testimony of McKinney, and hearsay. [11] Strange points out that the documents executed at the time of the dissolution of Southdale, Inc., do not refer to assignments of assets of Southdale, Inc., other than certain real property not involved in the transaction that is the basis of this action. Strange contends that actions alleging misrepresentation and deceit are personal actions that run with the ownership of the property and are not assignable. Strange argues that Southdale, Inc., as a dissolved corporation, had standing to commence the action in its own name and failed to do so. The trial court never ruled on the motions to strike; instead, one month later, the trial court entered a final judgment on other grounds. The trial court stated: Because the Court finds that there has been no breach of contract as to [Southdale], and because all tort claims are dismissed by application of the Statute of Limitations, it is not necessary to address [Southdale's] standing to bring this action. On appeal, Southdale, LLC, relies upon the transfer-of-assets document executed after the issue had been raised in Strange's motion filed in July 2006 and after the argument on the motion in September 2007. Strange's motion for a summary judgment was supported by ample evidence of the lack of any interest on the part of Southdale, LLC, in the transaction that is the basis of this action, thereby shifting the burden to Southdale, LLC, to adduce substantial evidence in opposition. Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794 (Ala.1989). The motion remained pending for over a year. Before the hearing on September 21, 2007, Southdale, LLC, offered no written response or evidence. As previously noted, Southdale, LLC, filed additional evidence after the hearing, and Strange and CSX moved to strike that evidence, noting the absence of any evidence in opposition before the hearing and the untimeliness of the evidence offered after the hearing. In its reply brief before this Court, Southdale, LLC, offers as justification for the belated submission the argument of the project participants at the hearing that Southdale, Inc., could have made such an assignment. We do not reach the issue whether the summary judgment is due to be affirmed on the basis of Southdale's alleged lack of standing, in view of the trial court's having deemed it unnecessary to reach this issue and the pendency of the motions to strike the evidence belatedly offered in opposition to the motion. Its failure to reach the issue of standing explains the trial court's failure to rule on these motions. The trial court has discretion in deciding whether to permit a party to reopen a case and to offer additional evidence. Green Tree Acceptance, Inc. v. Standridge, 565 So.2d 38, 46 (Ala.1990). Without the exercise of that discretion in favor of the nonmovant, the failure to submit evidence in opposition to the summary-judgment motion until after a hearing on the motion constitutes a failure on the nonmovant's part to sustain its burden. Harris v. Health Care Auth. of Huntsville, 6 So.3d 468, 477-78 (Ala.2008). Such discretion to allow a tardy response before the entry of a judgment on the motion must ordinarily be invoked by a motion filed under Rule 6(b), Ala. R. Civ. P. (When by these rules ... an act is required or allowed to be done at or within a specified time, the court for cause shown may at any time in its discretion.... (2) upon motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect....). However, a response to a motion to strike can be treated as a motion under Rule 6(b)(2) and should be disposed of pursuant to the standard established therein. See Hardwick v. Sunbelt Rentals, Inc., (No. 09-CV-1106) (CD.Ill. May 13, 2009) (not reported in F.Supp.2d), dealing with the analogous federal rule (Moving on to Plaintiff's motion to strike Union's Answer, Plaintiff points out that, before filing its Answer late, Union failed to request leave of Court to do so under Fed.R.Civ.P. 6(b)(1)(B). Although Plaintiff's observation appears to be correct, for purposes of efficiency, the Court will construe Union's response to Plaintiff's motion for default judgment as a Rule 6(b)(1)(B) motion for leave to file an untimely answer.). On remand, before reaching the merits of the issue of Southdale's standing, the trial court must rule on the motions to strike. In view of the unsettled status of the evidence properly to be considered, an issue not yet resolved by the trial court, we decline to reach the question whether the issue of standing is an appropriate alternative basis on which to affirm the trial court's judgment as to Southdale.