Opinion ID: 1692119
Heading Depth: 2
Heading Rank: 1

Heading: Claims Arising Out of the Alleged Loans

Text: Mallory argues that the trial court erred in entering a summary judgment in favor of Mary Elizabeth on his claim alleging that Mary Elizabeth owed him $250,723.98 [2] and that she has failed to repay him. This Court has stated: A plaintiff establishes a prima facie case in an action for money due on [an] open account by presenting evidence that money was delivered to the defendant, that it was a loan, and that it has not been repaid. 58 C.J.S. Money Lent § 7 (1948). `Ordinarily, an unexplained payment of money will be presumed to be made in payment of debt, or as a loan, rather than as a gift.' Bowline v. Cox, 248 Ala. 55, 26 So.2d 574 (1946). This presumption arises in relationships between parties in which the payor naturally places confidence in the payee that the money will be repaid. Furthermore, we recognize the general rule that if no time is stipulated, a loan is `presently payable.' Lindsey v. Hamlet, 235 Ala. 335, 179 So. 234 (1938). Livingston v. Tapscott, 585 So.2d 839, 841 (Ala.1991). Mary Elizabeth argues that Mallory's affidavit presented in opposition to her summary-judgment motion contradicts his earlier sworn deposition testimony, in which she says Mallory admitted that the money he paid her was going toward his obligation to pay expenses and, therefore, was ineffective in creating a genuine issue of fact as to whether the money Mallory paid her was a loan. This argument is without merit. This Court has stated: `[A] party is not allowed to directly contradict prior sworn testimony to avoid the entry of a summary judgment.' Continental Eagle Corp. v. Mokrzycki, 611 So.2d 313, 317 (Ala.1992), citing Doe v. Swift, 570 So.2d 1209, 1214 (Ala.1990). `When a party has given clear answers to unambiguous questions which negate the existence of any genuine issue of material fact, that party cannot thereafter create such an issue with an affidavit that merely contradicts, without explanation, previously given clear testimony.' Id., quoting Robinson v. Hank Roberts, Inc., 514 So.2d 958, 961 (Ala. 1987). However, when a party submits a subsequent affidavit merely to clarify his or her answers to ambiguous questions asked by counsel during a deposition or other prior sworn proceeding or to supply information not necessarily sought by questions asked at the deposition or other prior sworn proceeding, the trial court should consider the subsequent affidavit. See, e.g., Rickard v. Shoals Distrib., Inc., 645 So.2d 1378, 1382-83 (Ala.1994); and Tittle v. Alabama Power Co., 570 So.2d 601, 606-07 (Ala.1990). Wilson v. Teng, 786 So.2d 485, 497 (Ala. 2000). Mary Elizabeth relies on the following deposition testimony by Mallory to support her contention that Mallory admitted that the payments he made to her were for expenses and that they were not loans: Q. And you never said that you were paying your share of the expenses? You never said that or anything like that? A [Mallory]. I have said that I feel like I have paid my share of the expenses. Q. You're talking about  when you say you feel like you have paid your share of the expenses, you're talking about the money that you contend is loan? A. I'm talking about  yeah, yeah, it's kind of mixed up together. . . . . Q. Well, my question is: Do you owe her anything for expenses or were you just a guest living there for free for 40 months or longer? A. I don't know about your number on the months. I'm uncomfortable with the idea of the guest status. I believe in paying my way. Q. And were you paying your way? A. Yes, sir. Q. All right. And it wasn't a loan, you were paying your way, weren't you? A. It was all bottled up together. Mary Elizabeth relies on the above-quoted excerpts from Mallory's deposition testimony to argue that he admitted that the moneys he paid to her were for living expenses and that, therefore, his subsequent affidavit testimony, in which he states that the moneys paid to her were loans, is contradictory and cannot be considered for summary-judgment purposes. We initially note that Mary Elizabeth does not delineate that portion of Mallory's affidavit that supposedly contradicts the above-quoted deposition testimony. Further, Mary Elizabeth's argument is premised on her assertion that Mallory admitted in his deposition testimony that the moneys paid to her were for expenses and were not loans. However, a reading of Mallory's deposition excerpts in their entirety indicates that he consistently testified throughout his deposition that the moneys he paid to Mary Elizabeth were loans that she was obligated to repay. The above-quoted excerpts relied on by Mary Elizabeth are taken out of context; when they are read in conjunction with the remainder of Mallory's deposition testimony they are entirely consistent with the overall theme of Mallory's testimony. Mallory never denied in his deposition having incurred some expenses while he resided with Mary Elizabeth, stating that he was sure [he] did. Rather, Mallory testified that the payment of any expenses that he may have incurred should be in the nature of a set-off against the moneys he loaned Mary Elizabeth and the moneys he claims an interest in from the sale of the Neumann Drive property. [3] At no time during Mallory's deposition did he waiver from his contention that the moneys paid to Mary Elizabeth were loans that she was obligated to repay; therefore, no contradiction exists between Mallory's deposition testimony and his subsequent affidavit testimony. Relying upon Bowline v. Cox, 248 Ala. 55, 26 So.2d 574 (1946), Mary Elizabeth next argues that she is entitled to a presumption that when payments are made by a debtor, those payments are made in payment of a debt and that Mallory has made no showing rebutting this presumption. This Court stated in Bowline: `It is a correct doctrine to say that payments of money made by a debtor to an existing creditor, or made by one who is under obligation to pay to the receiver thereof, . . . will be deemed presumptively to apply as credits upon the obligation, and not as gratuities or gifts.' Bowline, 248 Ala. at 57, 26 So.2d at 577 (quoting 71 A.L.R. 1018). Mary Elizabeth's argument fails because it presumes that Mallory was a debtor. Viewing the record in a light most favorable to Mallory, as we are required to do, we conclude that a question of fact exists as to the nature of the moneys paid by Mallory to Mary Elizabeth and, therefore, a question of fact necessarily exists as to the nature of the relationship between Mallory and Mary Elizabeth that prevents Mary Elizabeth from presuming that Mallory was a debtor. Mallory presented copies of checks and account transfers indicating that he paid to, or on Mary Elizabeth's behalf, [4] moneys he alleges to be loans to Mary Elizabeth. Mallory testified that the moneys paid to, or on Mary Elizabeth's behalf, were loans that she was obligated to repay and that she acknowledged that the moneys paid to her were loans. Finally, Mallory testified that Mary Elizabeth has failed to repay those loans. Accordingly, we conclude that Mallory has presented a prima facie case of money owed; therefore, we must reverse the summary judgment as to this issue.
Mallory next argues that he is entitled to an equitable mortgage on the Neumann Drive property. He contends that in March 2001, Mary Elizabeth, in addition to the $60,000 that she had already borrowed from him, wanted to borrow additional money from him, but that he was unwilling to lend her any additional money without an agreement as to how the moneys that he had already lent her and any additional moneys that he may lend her in the future would be repaid. Mallory states that he and Mary Elizabeth entered into an oral agreement in March 2001, pursuant to which he would transfer one-half of his brokerage account to her and assume the mortgage payments, insurance payments, and utility payments on the Neumann Drive property in exchange for Mary Elizabeth's taking the Neumann Drive property off of the market and transferring to Mallory a half interest in the property as security for the payment to her from his brokerage account, his assuming the mortgage payments and other expenses associated with the property, and the $60,000 he had paid her between January 2000 and November 2000. Mallory states that the agreement provided that he would be paid for his one-half interest in the Neumann Drive property should it ever be sold. Mallory transferred $103,996.80 to Mary Elizabeth, which represented half of the value of his brokerage account, and assumed the mortgage payments, insurance payments, and utility payments on the Neumann Drive property. He contends that the Neumann Drive property was subsequently sold and that he was not paid for his interest in the property from the sale proceeds. Mary Elizabeth argues that Mallory's equitable-mortgage claim fails because, she argues, it violates the Statute of Frauds. We agree. The Statute of Frauds provides, in pertinent part: In the following cases, every agreement is void unless such agreement or some note or memorandum thereof expressing the consideration is in writing and subscribed by the party to be charged therewith or some other person by him thereunto lawfully authorized in writing: . . . . (5) Every contract for the sale of lands, tenements or hereditaments, or of any interest therein, except leases for a term not longer than one year, unless the purchase money, or a portion thereof is paid and the purchaser is put in possession of the land by the seller. . . .  § 8-9-2, Ala.Code 1975. An action seeking to declare an equitable mortgage on property in satisfaction of a debt secured by that property is subject to a Statute of Frauds defense. Edwards v. Scruggs, 155 Ala. 568, 46 So. 850 (1908). See also Davis v. Harris, 211 Ala. 679, 101 So. 458 (1924) (holding that to avoid the Statute of Frauds an equitable mortgage must be evidenced by a writing). A statutory exception to the writing requirement exists where the purchaser pays the purchase money, or a portion thereof, and the purchaser is put in possession of the land by the seller. § 8-9-2(5), Ala.Code 1975; and Keller v. Security Fed. Sav. & Loan Ass'n, 555 So.2d 151 (Ala.1989). In order to satisfy the requirements of the part-performance exception, the possession must be exclusively referable to the contract in issue. Keller, supra . Additionally, this Court has stated the following regarding the possession necessary to satisfy the partial-performance exception: `[T]he possession must be referable to the promise and not to some domestic relationship of the vendor and vendee. . . . ' `. . . . ` . . . If the possession . . . could be accounted for just as well by some other right or title actually existing in the vendee's favor, or by some relation between him and the vendor other than the alleged oral contract, it is not such a possession as the doctrine requires.' Smith v. Smith, 466 So.2d 922, 925 (Ala. 1985) (quoting Jones v. Jones, 219 Ala. 62, 64, 121 So. 78, 78-79 (1929)). It is undisputed that the parties' agreement regarding the Neumann Drive property was never reduced to writing. Further, although Mallory had paid the purchase price for his interest in the property, any claim of possession that he had in the property stemmed from the already existing living arrangement he had with Mary Elizabeth and was not exclusively referable to the parties' March 2001 agreement regarding the Neumann Drive property. Therefore, because any claim of possession that Mallory had in the Neumann Drive property was not exclusively referable to the March 2001 agreement, he has not satisfied the partial-performance exception to the writing requirement. Accordingly, Mallory's equitable-mortgage claim fails because it violates the Statute of Frauds, and we affirm the summary judgment as to this issue.
Mallory next argues that Mary Elizabeth made certain representations to him that induced him into making the loans alleged in this case. Mallory's entire argument as to this issue consists of approximately one-half page in his brief to this Court, contains no discussion regarding the representations that allegedly induced him to act, and cites no authority. Rule 28(a)(10), Ala. R.App. P., provides that the 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. It is well settled that `[w]here an appellant fails to cite any authority for an argument, this Court may affirm the judgment as to those issues, for it is neither this Court's duty nor its function to perform all the legal research for an appellant. Spradlin v. Birmingham Airport Auth., 613 So.2d 347, 348 (Ala. 1993) (quoting Sea Calm Shipping Co., S.A. v. Cooks, 565 So.2d 212, 216 (Ala. 1990)). Because Mallory presents virtually no argument and absolutely no authority in support of this issue, we affirm the judgment of the trial court as to this issue.
Mallory next asserts a promissory-fraud claim against Mary Elizabeth, alleging that she had no intention of repaying the moneys he lent her at the time she promised to do so. This Court has stated: `The elements of fraud are (1) a false representation (2) of a material existing fact (3) reasonably relied upon by the plaintiff (4) who suffered damage as a proximate consequence of the misrepresentation. To prevail on a promissory fraud claim such as that at issue here, that is, one based upon a promise to act or not to act in the future, two additional elements must be satisfied: (5) proof that at the time of the misrepresentation, the defendant had the intention not to perform the act promised, and (6) proof that the defendant had an intent to deceive.' Waddell & Reed, Inc. v. United Investors Life Ins. Co., 875 So.2d 1143, 1160 (Ala. 2003) (quoting Padgett v. Hughes, 535 So.2d 140, 142 (Ala.1988)). Further, `[w]hile the mere failure to perform the promised act is not by itself sufficient evidence of fraudulent intent, for purposes of a promissory-fraud claim, the factfinder may consider that failure, together with other circumstances, in determining whether, at the time the promise was made, the promisor intended to deceive.' Byrd v. Lamar, 846 So.2d 334, 343 (Ala. 2002) (quoting Ex parte Grand Manor, Inc., 778 So.2d 173, 182 (Ala.2000)). Mallory contends that he initially paid Mary Elizabeth $60,000 between January 2000 and November 2000 and that she promised to repay that money. However, the parties reached a new agreement regarding the $60,000 in March 2001, when the parties entered into the agreement involving the Neumann Drive property. According to Mallory, Mary Elizabeth agreed to transfer a half interest in the Neumann Drive property to him as security for the initial loans totaling $60,000, [5] for the transfer of $103,996.80 from his brokerage account, and for his assuming the mortgage payments, as well as other expenses, associated with the Neumann Drive property. Mallory testified that under this agreement he would be paid for his interest in the property should the property ever be sold. The property was subsequently sold, and Mallory was not paid for his interest in the property. Mallory alleges that when she entered into the agreement regarding the Neumann Drive property in March 2001, Mary Elizabeth did not intend to pay him for his interest in the Neumann Drive property should it be sold. Mallory's promissory-fraud claim is based on Mary Elizabeth's alleged oral promise that she would transfer a half interest in the Neumann Drive property to Mallory as security for the moneys advanced to her and that she would pay him for his interest in the property should it ever be sold. [A]n oral promise that is void by operation of the Statute of Frauds will not support an action against the promisor for promissory fraud. Bruce v. Cole, 854 So.2d 47, 58 (Ala.2003). Because the parties' agreement regarding the Neumann Drive property violates the Statute of Frauds, that agreement will not support Mallory's promissory-fraud claim. Accordingly, the trial court did not err in entering a summary judgment in favor of Mary Elizabeth on this claim.
Mallory next contends that the trial court erred in entering a summary judgment in favor of Mary Elizabeth on his unjust-enrichment claim. In order for a plaintiff to prevail on a claim of unjust enrichment, the plaintiff must show that the `defendant holds money which, in equity and good conscience, belongs to the plaintiff or holds money which was improperly paid to defendant because of mistake or fraud. ' Dickinson v. Cosmos Broad. Co., 782 So.2d 260, 266 (Ala. 2000) (quoting Hancock-Hazlett Gen. Constr. Co. v. Trane Co., 499 So.2d 1385, 1387 (Ala.1986)). . . . `The doctrine of unjust enrichment is an old equitable remedy permitting the court in equity and good conscience to disallow one to be unjustly enriched at the expense of another.' Battles v. Atchison, 545 So.2d 814, 815 (Ala.Civ.App.1989). Avis Rent A Car Sys., Inc. v. Heilman 876 So.2d 1111, 1123 (Ala.2003). `One is unjustly enriched if his retention of a benefit would be unjust.' Welch v. Montgomery Eye Physicians, P.C., 891 So.2d 837, 843 (Ala.2004) (quoting Jordan v. Mitchell, 705 So.2d 453, 458 (Ala.Civ.App.1997)). The retention of a benefit is unjust if `(1) the donor of the benefit . . . acted under a mistake of fact or in misreliance on a right or duty, or (2) the recipient of the benefit . . . engaged in some unconscionable conduct, such as fraud, coercion, or abuse of a confidential relationship. In the absence of mistake or misreliance by the donor or wrongful conduct by the recipient, the recipient may have been enriched, but he is not deemed to have been unjustly enriched.' Welch, 891 So.2d at 843 (quoting Jordan, 705 So.2d at 458). The success or failure of an unjust-enrichment claim depends on the particular facts and circumstances of each case. Heilman, supra . Mallory alleged in his second amended complaint that he lent the moneys in question to Mary Elizabeth pursuant to an agreement with her pursuant to which she would repay the moneys and that to allow Mary Elizabeth to retain the moneys paid to her would result in her being unjustly enriched. Mary Elizabeth's basis for retaining the large sums of money advanced to her by Mallory is a purported oral agreement under which she would provide Mallory with room, board, and incidentals and charge him for those expenses as she deemed appropriate. Regarding the Neumann Drive property, Mary Elizabeth contends that she had wanted to sell the property but had been unable to do so and that Mallory wanted to keep the property in the family for the benefit of the parties' daughter. Mary Elizabeth, therefore, proposed to Mallory that she would transfer a one-half interest in the property to him in exchange for his transferring to her one-half of the value of his brokerage account; his assuming the expenses associated with the property, including the monthly mortgage payments of $3,993.77; both parties' agreeing to change the trustee of a trust that had been established for their daughter; and both parties' agreeing to execute irrevocable wills each containing a $500,000 bequest to the other. Mallory transferred to Mary Elizabeth $103,996.80 representing one-half of his brokerage account and assumed the monthly mortgage payments as well as other expenses associated with the Neumann Drive property. Mary Elizabeth eventually sold the Neumann Drive property for $1.2 million and has paid Mallory nothing from the sale proceeds. Mary Elizabeth contends that Mallory repudiated the agreement because he failed to change the trustee on the trust established for their daughter and failed to execute the will in her favor. She, therefore, unilaterally informed him that she was going to keep the $103,996.80 as a contribution toward his living expenses and was recharacterizing the monthly mortgage payments of $3,993.77 as a payment toward his living expenses. Mallory insists that the agreement regarding the Neumann Drive property did not include changing the trustee of the daughter's trust or executing wills in favor of each other. We conclude from the evidence presented that a genuine issue of material fact exists as to whether Mallory fully performed under the agreement he and Mary Elizabeth had reached concerning the Neumann Drive property, i.e., that the property would not be sold, but rather kept in the family, and whether Mary Elizabeth, in violation of the agreement, sold the property for $1.2 million, and rather than pay Mallory as agreed, retained the substantial sum of money redesignating it as living expenses under the guise of an oral agreement that she could charge Mallory as she deemed appropriate for his room and board. Such conduct on the part of Mary Elizabeth would rise to the level of unconscionable conduct as that term is discussed in Welch, supra, and Jordan, supra . Accordingly, we reverse the summary judgment entered by the trial court on Mallory's unjust-enrichment claim.