Court Opinion

ID: 9931572
Source: CourtListenerOpinion
Date Created: 2024-02-09 15:02:22.945545+00
Date Added: 2024-06-11T12:24:06.174451
License: Public Domain

Rel: February 9, 2024

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter.
Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue,
Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other errors, in order that corrections
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   SUPREME COURT OF ALABAMA
                               OCTOBER TERM, 2023-2024
                                  ____________________

                                          SC-2022-0863
                                       ____________________

                        David Roberson and Anna Roberson

                                                      v.

                                 Drummond Company, Inc.

                        Appeal from Jefferson Circuit Court
                                  (CV-19-901210)

PARKER, Chief Justice.

        David Roberson and Anna Roberson appeal from an order entered

by the Jefferson Circuit Court dismissing their claim for indemnification

from Drummond Company, Inc. ("Drummond"), for damages stemming
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from David's federal conviction for bribery. Because we conclude that the

damages the Robersons seek are not available through indemnification,

we affirm the order dismissing their indemnification claim.

                                 I. Facts

     David was a vice president of Drummond. In 2013, the

Environmental Protection Agency proposed placing polluted property in

Jefferson County on its "National Priorities List" for cleanup. The

cleanup costs were estimated at over $100 million. To avoid responsibility

for the cleanup costs, Drummond hired Balch & Bingham, LLP ("Balch"),

to conduct a public-relations campaign to prevent the property from being

placed on the National Priorities List. As part of that campaign, Balch

employed the Oliver Robinson Foundation, which was controlled by then-

Representative Oliver Robinson, to convince Birmingham residents not

to have their property tested for toxins. After making payments to the

foundation, Balch submitted invoices to Drummond for reimbursement.

     After receiving Balch's invoices, Drummond's general counsel

asked David to approve payment of the invoices. David asked Joel

Gilbert, a lobbyist employed by Balch, if he had asked Balch's ethics

lawyers whether the plan was ethical and legal. Gilbert represented to

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David that Balch's ethics lawyers had reviewed the plan and determined

that it was legal. David then approved payment of Balch's invoices.

Thereafter, because he approved the payments to Balch, David was

convicted of bribery in violation of federal law and was sentenced to 30

months in prison.

     After his conviction, David was allowed to remain free on bond

pending his appeal. Drummond retained David as an employee on

administrative leave and continued paying him his salary and benefits.

A little over six and a half months later, Drummond terminated David's

employment.

     The Robersons sued Drummond and Balch. In their third amended

complaint, which is the operative complaint, the Robersons asserted six

claims against Drummond. In Count 1, the Robersons asserted a claim

for indemnification. In summary, the Robersons alleged that Drummond,

through its general counsel, had directed David to make the payments

that the jury in the criminal proceedings later found to be bribes; that

David had not known the payments were bribes and had acted in good

faith on Gilbert's misrepresentation that Balch's in-house ethics lawyers

had determined that the plan was legal; that he had incurred damages

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as a result of making the payments; and that Drummond had a duty to

indemnify him for those damages, but had failed to do so.

     In Count 12, the Robersons asserted a claim of promissory fraud

based on Drummond's alleged promise to the Robersons that "they had

nothing to worry about" and that Drummond would keep David on paid

administrative leave until his appeal of his conviction was complete and

would pay his full salary, bonuses, and benefits.

     Drummond moved to dismiss the Robersons' claims against it in the

third amended complaint. After a hearing, the circuit court dismissed the

indemnification claim, ruling:

           "Indemnification generally comes into play in a
     contractual arrangement between the Parties. [The
     Robersons] assert[] in the [third amended] Complaint that …
     Drummond had and 'has a duty to indemnify [David] for all
     losses and damages that he has suffered and will suffer as a
     direct result of performing the duties assigned to him by
     Drummond via its General Counsel.' … The Court
     acknowledges that Compensatory Damages are awarded to a
     Plaintiff, who has proven his claim(s), to fairly and reasonably
     compensate him for the harm caused by another's
     wrongdoing. The Court is unaware of an automatic duty to
     Indemnify one for all losses or damages currently suffered and
     anticipated to [be] suffer[ed] in the future as a result of
     performing assigned 'duties,' without an agreement between
     the Parties establishing such a duty. [The Robersons] have
     neither produced nor alleged the existence of a contract or
     agreement between the [Robersons] and … Drummond to

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     establish such a duty. … [The Robersons] do not allege any
     contract or agreement between [them] and … Drummond that
     places a 'duty' on … Drummond to compensate [the
     Robersons] for all losses or damages suffered now and
     anticipated to [be] suffer[ed] in the future. A duty to
     indemnify, such as alleged by the [Robersons], is not
     automatic. The Court FINDS that [the Robersons] cannot
     prove any relief consistent with the allegations set forth in the
     [third amended] Complaint to support the Count of
     Indemnification."

(Capitalization in original; emphasis omitted.) The circuit court denied

Drummond's motion as to the Robersons' other claims against

Drummond.

     The Robersons then filed a written motion to reconsider. First, the

Robersons argued that the circuit court had overlooked a principal's

common-law duty to indemnify an agent for damages resulting from

actions the agent takes at the principal's direction, if the agent acted in

good faith. In the alternative, the Robersons argued that, even though a

contract is not required to show a duty to indemnify, Drummond had in

fact agreed to indemnify the Robersons by paying for David's legal fees

and by paying his full salary and benefits. The Robersons attached to

their motion a copy of the minutes of a special meeting of Drummond's

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board of directors ("the board"). Those minutes reflect that the board

agreed to the following:

          "1. David Roberson will continue on leave pending final
     outcome of the proceedings[;]

          "2. David Roberson will continue to receive pay and
     benefits; and,

          "3. [Drummond] will continue to indemnify David
     Roberson for legal fees for his defense."

     Thereafter, the circuit court entered an order denying an oral

motion to reconsider that the Robersons' had made at a status conference,

but it did not address the Robersons' written motion to reconsider.

Accordingly, the Robersons moved to reconsider the circuit court's order

denying their oral motion to reconsider. The Robersons reasserted the

arguments made in their original written motion to reconsider. The

Robersons also attached the minutes of the board's special meeting to

that motion.

     The circuit court then entered another order denying the Robersons'

motions to reconsider. In that order, the circuit court ruled:

     "[T]he proffered excerpt of the transcript of a July 23, 2018,
     Meeting of … Drummond's [board of directors] did not
     constitute a contract between … [David] and … Drummond,
     but instead is relevant to [the Robersons' promissory-fraud

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      claim] …. The Court FINDS that the facts set forth in [the
      Robersons' indemnification claim] were not sufficient to prove
      the existence of a contract between … [David] and …
      Drummond requiring him to perform certain acts … which he
      did not know to be unlawful, thus triggering indemnification
      for all damages incurred by … [David] in performing the
      alleged requested acts. The Court FINDS that the [Robersons]
      are not prejudiced by the Dismissal of [the Robersons'
      indemnification claim] in light of the factually more specific
      allegation in [the Robersons' promissory-fraud claim]. The
      Court FINDS that the facts set forth in [the Robersons'
      promissory-fraud claim] incorporate[] the facts supporting the
      [Robersons' claim for indemnification] along with
      indemnification for damages sustained by [the Robersons], if
      proven."

(Capitalization in original; emphasis omitted.) The circuit court certified

that order as final under Rule 54(b), Ala. R. Civ. P. The Robersons

appeal. 1

                             II. Jurisdiction

      As a threshold matter, we must address whether the circuit court

properly certified its order dismissing the Robersons' indemnity claim as

      1On December 5, 2023, this Court ordered the parties to submit

supplemental briefing to address the following issue: "Whether the
damages the Robersons seek in their indemnification claim against
Drummond that are unrelated to liabilities of the Robersons to third
parties fall within the definition of the term 'indemnification' as that
term is currently defined by Alabama law?" Accordingly, the Robersons'
appeal was submitted both on the original briefs and the supplemental
briefs filed in response to this Court's order.
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final under Rule 54(b). In its order denying the Robersons' motions to

reconsider, the circuit court found that the facts set forth in Count 12,

the Robersons' promissory-fraud claim, incorporated the facts alleged in

the Robersons' indemnification claim. As the Robersons note in their brief

to this Court, if that finding was correct, then the circuit court's

certification of finality would be questionable: if the facts underlying both

claims are the same, then there would be a possibility that the two claims

might involve the same issues.

     Rule 54(b) provides, in relevant part:

     "When more than one claim for relief is presented in an action,
     … the court may direct the entry of a final judgment as to one
     or more but fewer than all of the claims or parties only upon
     an express determination that there is no just reason for delay
     and upon an express direction for the entry of judgment."

     This Court has held that a trial court exceeds its discretion in

finding that there is no just reason for delay if the issues in the

adjudicated claim and those in the pending claim are " ' " 'so closely

intertwined that separate adjudication would pose an unreasonable risk

of inconsistent results.' " ' " Lighting Fair, Inc. v. Rosenberg, 63 So. 3d

1256, 1263 (Ala. 2010) (citations omitted). This Court has adopted the

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following five factors to consider when determining whether there is a

just reason for delay in reviewing an order certified under Rule 54(b):

     " ' "(1) the relationship between the adjudicated and
     unadjudicated claims; (2) the possibility that the need for
     review might or might not be mooted by future developments
     in the [trial] court; (3) the possibility that the reviewing court
     might be obliged to consider the same issue a second time; (4)
     the presence or absence of a claim or counterclaim which could
     result in a set-off against the judgment sought to be made
     final; (5) miscellaneous factors such as delay, economic and
     solvency considerations, shortening the time of trial, frivolity
     of competing claims, expense, and the like." ' "

Id. at 1264 (citations, emphasis, and footnotes omitted).

     Here, the relationship between the indemnification claim and the

promissory-fraud claim is remote. As the Robersons note, the

indemnification claim and the promissory-fraud claim are based on

entirely different legal theories. The indemnification claim is based on an

employer's alleged common-law and contractual duties to indemnify; the

promissory-fraud claim is based on an allegedly fraudulent promise to

pay David's salary and benefits.

     Further, the issues in the two claims are not intertwined because

each claim is based on different facts. The indemnification claim is based

on David's employment relationship with Drummond before his

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conviction and the directions he allegedly received from its general

counsel; the promissory-fraud claim is based on Drummond's alleged

representation to David after he was convicted that the Robersons "had

nothing to worry about."

     Finally, the damages sought in each claim are different. In the

indemnification claim, the Robersons sought damages resulting from his

prosecution and indictment; in the promissory-fraud claim, the

Robersons sought damages for emotional distress and damages resulting

from lost employment opportunities that Anna had declined based on the

alleged representation, the "fire sale" of their house and its contents, and

the lost benefits and salary that Drummond allegedly promised to pay

David.

     For these reasons, it does not appear that the indemnification claim

and the promissory-fraud claim are significantly related. And because

the indemnification claim and the promissory-fraud claim are not

significantly related, the other factors are less relevant. Because the two

claims involve different legal theories, issues, and damages, the

possibility that later action in the circuit court could moot the issues in

the adjudicated indemnification claim is minimal. For the same reason,

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there is little risk that this Court will be required to address the issues

presented here again in reviewing the circuit court's ruling on the

promissory-fraud claim. Further, there are no other claims or

counterclaims that could result in a setoff in the damages awarded.

Accordingly, it does not appear that the issues in the indemnification

claim and the promissory-fraud claim are so closely intertwined that

separate adjudication will pose an unreasonable risk of inconsistent

results.

     Finally, there are several miscellaneous factors that weigh in favor

of immediate consideration of the order dismissing the indemnification

claim. For instance, were we to wait until after trial of the promissory-

fraud claim to determine whether the circuit court properly dismissed the

indemnification claim, only to conclude at that point that the circuit court

had erred in dismissing the indemnification claim, the circuit court would

have to hold another trial on that claim. Thus, factors such as delay,

expense, shortening the time of trial, and judicial economy weigh in favor

of immediate review of the order dismissing the indemnification claim.

Accordingly, certification of the order dismissing the indemnification

claim was proper here.

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                         III. Standard of Review

      Rule 12(b)(6), Ala. R. Civ. P., provides for dismissal of claims for

failure to state a claim upon which relief can be granted. "The

appropriate standard of review under Rule 12(b)(6) is whether, when the

allegations of the complaint are viewed most strongly in the pleader's

favor, it appears that the pleader could prove any set of circumstances

that would entitle her to relief." Nance ex rel. Nance v. Matthews, 622

So. 2d 297, 299 (Ala. 1993). "In making this determination, this Court

does not consider whether the plaintiff will ultimately prevail, but only

whether she may possibly prevail." Id. Further, "a Rule 12(b)(6) dismissal

is proper only when it appears beyond doubt that the plaintiff can prove

no set of facts in support of the claim that would entitle the plaintiff to

relief." Id.

                               IV. Analysis

      The Robersons contend that the circuit court erred in holding that

they had failed to state a claim for indemnification because they did not

allege that Drummond had a contractual duty to indemnify David.

Specifically, the Robersons challenge the circuit court's following ruling:

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           "Indemnification generally comes into play in a
     contractual arrangement between the Parties. [The
     Robersons] assert[] in the [third amended] Complaint that …
     Drummond had and 'has a duty to indemnify [David] for all
     losses and damages that he has suffered and will suffer as a
     direct result of performing the duties assigned to him by
     Drummond via its General Counsel.' … The Court
     acknowledges that Compensatory Damages are awarded to a
     Plaintiff, who has proven his claim(s), to fairly and reasonably
     compensate him for the harm caused by another's
     wrongdoing. The Court is unaware of an automatic duty to
     Indemnify one for all losses or damages currently suffered and
     anticipated to [be] suffer[ed] in the future as a result of
     performing assigned 'duties,' without an agreement between
     the Parties establishing such a duty. [The Robersons] have
     neither produced nor alleged the existence of a contract or
     agreement between the [Robersons] and … Drummond to
     establish such a duty. … [The Robersons] do not allege any
     contract or agreement between [them] and … Drummond that
     places a 'duty' on … Drummond to compensate [the
     Robersons] for all losses or damages suffered now and
     anticipated to [be] suffer[ed] in the future. A duty to
     indemnify, such as alleged by the [Robersons], is not
     automatic. The Court FINDS that [the Robersons] cannot
     prove any relief consistent with the allegations set forth in the
     [third amended] Complaint to support the Count of
     Indemnification."

(Capitalization in original; emphasis omitted.) They also challenge the

following ruling in the circuit court's order denying their motions to

reconsider:

     "[T]he facts set forth in [the Robersons' indemnification claim]
     were not sufficient to prove the existence of a contract
     between [David] and … Drummond requiring him to perform

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     certain acts … which he did not know to be unlawful, thus
     triggering indemnification for all damages incurred by …
     [David] in performing the alleged requested acts."

In challenging those rulings, the Robersons argue that (1) Alabama

common law imposes a duty on a principal to indemnify an agent; (2) they

alleged that Drummond had a contractual duty to indemnify David both

by undertaking to pay David his salary and benefits and by agreeing to

reimburse his legal fees and by adopting a resolution to do so in its board

minutes;   and    (3)   they   alleged   facts   supporting   court-ordered

indemnification under the Alabama Business and Nonprofit Entity Code

("the ABANEC"), § 10A-1-1.01 et seq., Ala. Code 1975.

     Before we address those arguments, it is helpful to review what

indemnification is. This Court has defined "indemnity" as "the obligation

or duty resting on one person[] to make good any loss or damage another

has incurred[] while acting at his request or for his benefit." Vandiver &

Co. v. Pollak, 107 Ala. 547, 553, 19 So. 180, 182 (1895). See also 42 C.J.S.

Indemnity § 1 (2017) ("Generally, 'indemnity' is defined as an obligation

of one party to pay or satisfy the loss or damage incurred by another

party."). Indemnity "permit[s] a defendant forced to pay damages to a

plaintiff to recoup those damages from a third party on the basis of some

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independent legal theory." 2 Michael L. Roberts, Alabama Tort Law §

36.05 (7th ed. 2021) (emphasis added). Generally, "[i]ndemnity springs

from contract[,] express or implied." Vandiver, 107 Ala. at 553, 19 So. at

182.

              "Whether the indemnitor … [is] liable over to the
       indemnitee for damages assessed against the indemnitee may
       be ascertained by an action on the indemnitee contract, but
       this action cannot be maintained until the existence of
       liability of the indemnitee is determined by some procedure
       known to law, and the amount thereof becomes
       ascertainable."

Jenelle Mims Marsh, Alabama Law of Damages § 17:10 (6th ed. 2012)

(emphasis added).

       This Court has further noted that " '[t]he basis for indemnity is

restitution, and the concept that one person is unjustly enriched at the

expense of another when the other discharges liability that it should be

his responsibility to pay.' " Amerada Hess Corp. v. Owens-Corning

Fiberglass Corp., 627 So. 2d 367, 370 (Ala. 1993) (quoting Restatement

(Second) of Torts § 886B, cmt. c. (Am. L. Inst. 1977)). "An indemnity

provision generally does not apply to claims between the parties to the

agreement, but obligates the indemnitor to protect the indemnitee

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against claims brought by third parties." 42 C.J.S. Indemnity § 1

(footnotes omitted; emphasis added).

     Accordingly, a duty to indemnify includes a duty to pay another

party's out-of-pocket expenses, especially when those out-of-pocket

expenses are imposed through a judicial determination of liability to a

third party. This principle highlights a fundamental problem that

permeates all of the Robersons' arguments. The losses they seek to

recover were not indemnifiable because they were not judicially imposed

liabilities to a third party or out-of-pocket expenses that David incurred

in processing the invoices. David lost his salary and benefits, not because

his wages had been garnished to satisfy an obligation to a third party,

but because Drummond dismissed him. Similarly, David's mental

anguish, worry, and distress were not expenses for which he was found

liable because of his conduct. Whatever claims the Robersons may have

against Drummond for failure to pay his salary and benefits and for the

mental anguish, worry, and distress he suffered, those claims are not

indemnification claims.

     The only indemnifiable expense that David incurred was his legal

fees that he incurred in the federal criminal proceedings. But it is

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undisputed that Drummond fully indemnified David for those expenses.

The Robersons even conceded in their third amended complaint that

"[Drummond] has paid [David's] legal fees in the United States District

Court and in the Eleventh Circuit Court of Appeals to date."

     With this clarification in mind, we now proceed to consider the

Robersons' particular arguments.

A. Common-Law Indemnification

     In challenging the circuit court's rulings, the Robersons first

contend that the circuit court disregarded the common-law duty to

indemnify. The common-law duty to indemnify is well established in

Alabama law. As early as 1855, this Court held:

          "Every man who employs another to do an act which the
     employer appears to have a right to authorize him to do,
     undertakes to indemnify him for all such acts as the agent
     does not know to be unlawful, and as would be lawful if the
     employer had the authority he pretends to have."

Moore v. Appleton, 26 Ala. 633, 637 (Ala. 1855) (emphasis added). "In all

such cases, a promise of indemnity is implied, upon the plain dictates of

reason and natural justice." Id. at 638. In Moore, 26 Ala. at 637, this

Court cited § 339 of Joseph Story's treatise on agency, which contains the

following discussion of the common-law duty to indemnify:

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     "[I]t may be stated, as a general principle of law, that an
     agent, who commits a trespass, or other wrong to the property
     of a third person, by the direction of his principal, if at the
     time he has no knowledge or suspicion, that it is such a
     trespass or wrong, but acts bona fide, will be entitled to a
     reimbursement and contribution from his principal for all the
     damages which he sustains thereby. For, although the general
     doctrine of the common law is, that there can be no
     reimbursement or contribution among wrongdoers, whether
     they are principals, or are agents; yet that doctrine is to be
     received with the qualification, that the parties know, at the
     time, that it is a wrong. And in all these cases, there is no
     difference whether there be a promise of indemnity, or not; for
     the law will not enforce a contract of indemnity against a
     known and meditated wrong; and, on the other hand, where
     the agent acts innocently, and without notice of the wrong, the
     law will imply a promise on the part of the principal to
     indemnify him."

Joseph Story, Commentaries on the Law of Agency § 339 (6th ed. 1863)

(footnotes omitted). See also Vandiver, 107 Ala. at 554, 19 So. at 182

(quoting the same passage from Story's Commentaries).

     More recently, this Court has held that,

     " '[a]s a general rule, where an agent is employed or directed
     by another to do an act in his behalf, the law implies a promise
     of indemnity by the principal for damages resulting to the
     agent proximately from the execution of the agency, and of
     reimbursement for necessary expenses advanced or incurred
     by the agent in order to consummate that which he is directed
     to do. Under this rule the principal should reimburse the
     agent for, or exonerate him from, authorized payments on
     behalf of the principal ….' "

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Lauderdale v. Peace Baptist Church of Birmingham, 246 Ala. 178, 182,

19 So. 2d 538, 542 (1944) (citations omitted).

     The Robersons are correct that the circuit court overlooked the

common-law duty to indemnify in its order. Nevertheless, there are

multiple problems with the Robersons' common-law-indemnification

argument. First, as explained above, even if Drummond had a common-

law duty to indemnify David, that duty did not include a duty to continue

paying David his salary and benefits or to protect him from mental

anguish, worry, or distress, because those losses were not "damages" that

David sustained as a result of his conduct.

     Further, in each of the cases the Robersons cite in which this Court

held that there was a common-law duty to indemnify, the agent was only

civilly liable for actions done at the principal's direction. See Moore, 26

Ala. at 639 (holding that agent was entitled to indemnification for

damages he incurred by wrongfully dispossessing occupant of land on

behalf of principal); Vandiver, 107 Ala. at 560, 19 So. at 185 (holding that

creditor was entitled to contribution from other creditors for damages

resulting from wrongful sale of attached property); Lauderdale, 246 Ala.

at 183, 19 So. 2d at 542 (holding that pastor's estate was entitled to

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indemnification for debt pastor personally incurred in purchasing a

building for a church); Parker v. Mauldin, 353 So. 2d 1375 (Ala. 1977)

(holding that agent was entitled to indemnification for damages resulting

from wrongful repossession of cotton picker); Creel v. Crim, 812 So. 1259

(Ala. Civ. App. 2001) (holding that lumberman was entitled to

indemnification for damages arising from wrongfully cutting trees on

property at neighbor's direction). The Robersons point to no authority

finding a common-law duty to indemnify an agent from a criminal

indictment, prosecution, conviction, or criminal penalty. Accordingly, to

the extent that the Robersons seek indemnification for the criminal

penalties David incurred, they fail to demonstrate that the common-law

duty to indemnify includes the type of indemnification that they seek.

     For these reasons, the Robersons fail to demonstrate that they

sufficiently pleaded a claim for common-law indemnification.

B. Contractual Indemnification

     Next, the Robersons contend that their indemnification claim

stated a claim arising from the breach of a contract to indemnify.

Specifically, they take issue with the circuit court's statements in its

initial order dismissing the indemnification claim that the Robersons

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"have neither produced nor alleged the existence of a contract or

agreement between the [Robersons] and … Drummond to establish [a

duty to indemnify]" and that they did "not allege any contract or

agreement between [them] and … Drummond that places a 'duty' on …

Drummond to compensate [the Robersons] for all losses or damages

suffered now and anticipated to [be] suffer[ed] in the future." (Emphasis

in original.)

      The Robersons contend that they sufficiently alleged the existence

of a contract calling for indemnification in two ways. First, they contend

that Drummond entered into an implied contract to indemnify David by

continuing to pay his salary and benefits and by paying his legal fees. In

the alternative, they contend that Drummond entered into a contract to

indemnify David when its board adopted a resolution to continue paying

David his salary and benefits and to indemnify him for legal fees.

      1. Implied Contract to Indemnify

      The Robersons admit that, in their indemnification claim, they did

not specifically allege that Drummond's duty to indemnify David arose

from a contract or an agreement. Nevertheless, they contend that they

pleaded the existence of a contract according to its legal effect. In support,

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they cite a case in which this Court stated that a " 'plaintiff, at his

election, may set [a contract] forth verbatim in the complaint, attach a

copy as an exhibit, or plead it according to its effect.' " Berry v. Druid City

Hosp. Bd., 333 So. 2d 796, 801 (Ala. 1976) (citation omitted). The

Robersons note that they pleaded that Drummond "undertook to perform

its duty of indemnity" by paying David's legal fees and salary.

      As explained above, the basic flaw in the Robersons' argument is

that the duties they allege Drummond undertook, other than payment of

David's legal fees, were not "indemnification." The Robersons fail to

recognize that, to state a claim for recovery of David's lost salary and

benefits, they should have pleaded a simple breach-of-contract claim. The

obligation that they allege Drummond undertook was not a promise to

indemnify David; it was simply a promise not to fire him. But the

Robersons did not assert a breach-of-contract claim. "It is not the duty of

the courts to create a claim which the plaintiff has not spelled out in the

pleadings." McCullough v. Alabama By-Prods. Corp., 343 So. 2d 508, 510

(Ala. 1977) (citing Case v. State Farm Mut. Auto. Ins. Co., 294 F.2d 676

(5th Cir. 1961)).

      2. Board Minutes

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     Before we consider if the board minutes that the Robersons

attached to    their   motions to    reconsider   were a     contract   for

indemnification, we must first determine whether the minutes were

properly before the circuit court. In their brief to this Court, the

Robersons recognize that a trial court is not ordinarily required to

consider documents submitted with a motion to reconsider. Nevertheless,

they contend that we can consider the board minutes on appeal because

the circuit court actually considered the minutes in denying their motions

to reconsider, without any objection from Drummond. The Robersons

note that we have previously reviewed an issue that was raised for the

first time in a motion to reconsider because the trial court had amended

its order to address the issue. Maxwell v. Dawkins, 974 So. 2d 282, 286

(Ala. 2006). The Robersons' argument turns on the following portion of

the circuit court's order denying their motions to reconsider:

           "In Denying the [Robersons'] Leave to file a Fourth
     Amended Complaint[ 2] while addressing [the Robersons']
     proposed claim for Indemnification by Drummond based on
     an alleged Breach of Contract, the Court acknowledges that
     … the Court Determined that the proffered excerpt of the
     transcript of a July 23, 2018, Meeting of [Drummond's]

     2The Robersons do not challenge the denial of their motion for leave

to file a fourth amended complaint.
                                   23
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     Executive Committee did not constitute a contract between
     [David] and [Drummond], but instead is relevant to [the
     Robersons'] [promissory-fraud claim]."

(Capitalization in original; emphasis omitted.)

     Although a copy of the Robersons' motion for leave to file a fourth

amended complaint is not in the record, it appears that the Robersons

attached the board minutes to that motion in support of its proposed

additional claim for indemnification based on a breach of a contract to

indemnify. In denying that motion, the circuit court ruled on the

Robersons' argument that the board minutes constituted a contract for

indemnification, and the circuit court incorporated that previous ruling

in denying the Robersons' motions to reconsider. Thus, the Robersons are

correct that the circuit court considered the board minutes in ruling on

the motions to reconsider. Accordingly, they are properly before us.

     According to the minutes, Drummond's board agreed to the

following:

          "1. David Roberson will continue on leave pending final
     outcome of the proceedings[;]

          "2. David Roberson will continue to receive pay and
     benefits; and,

                                   24
SC-2022-0863

          "3. [Drummond] will continue to indemnify David
     Roberson for legal fees for his defense."

     The Robersons are correct that the board did agree to "indemnify"

David, but, as Drummond points out, the board used the word

"indemnify" only with regard to David's legal fees for his defense, and, as

discussed above, there is no dispute that Drummond fully indemnified

David for his legal fees.

     Nevertheless, the Robersons argue that Drummond's resolution to

pay David's salary and benefits is parallel to its resolution to indemnify

David for his legal fees. Thus, they contend that both Drummond's

obligation to pay David's salary and benefits and its obligation to

indemnify David for his legal fees continued to the end of his appeal. But

even if the Robersons are correct that Drummond's obligations under the

minutes continued for the same amount of time, that fact is insufficient

to establish that both obligations involved "indemnification."

     As explained above, David's loss of his salary and benefits was not

a liability or expense that he incurred to a third party because he

processed the invoices. Thus, regardless of whether the Robersons cast

Drummond's decision to fire David as a breach of a corporate bylaw, a

                                    25
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breach of a corporate resolution, or a breach of an implied contract, they

cannot make it the basis of an indemnification claim.

     The Robersons also contend that the board minutes indicate that

Drummond's bylaws required Drummond to indemnify David by paying

his salary and benefits pending resolution of his appeal. They point to the

minutes' statement that "[t]he Board discussed Company Bylaws

including certain determinations involving indemnification." Relying on

that statement, the Robersons contend that "the resolution shows that

Drummond has bylaws concerning indemnification and that it acted

pursuant to those bylaws when it placed [David] on paid leave." The

Robersons'   argument     is   based    on   speculation   regarding   what

Drummond's bylaws actually required. They did not attach a copy of the

bylaws to their written motion to reconsider or otherwise include it in the

record, and they completely failed to allege in their third amended

complaint that the bylaws required Drummond to continue paying

David's salary and benefits. All they included in the record was the

minutes, which indicate only that the board discussed the bylaws'

indemnification provisions. That statement does not support the

inference that everything the board resolved to do was based on the

                                       26
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bylaws' requirements. The fact that the board decided to continue paying

David's salary and benefits after discussing Drummond's bylaws

regarding indemnification does not mean that Drummond's bylaws

required Drummond to "indemnify" David by paying his salary.

C. Court-Ordered Indemnification

     Finally, the Robersons contend that their indemnification claim

states a claim for court-ordered indemnification under the ABANEC.

But, as Drummond points out in its brief to this Court, the Robersons did

not assert its argument under the ABANEC in its response to

Drummond's motion to dismiss, in the hearing on Drummond's motion to

dismiss, in their written motion to reconsider the circuit court's order

dismissing the indemnification claim, or in their motion to reconsider the

circuit court's order denying the Robersons' oral motion to reconsider the

dismissal of the indemnification claim. Rather, they assert it for the first

time on appeal. It is well settled that this Court will not reverse a trial

court's judgment on an issue not presented to the trial court. Ex parte

Knox, 201 So. 3d 1213, 1216 (Ala. 2015). Accordingly, the Robersons

failed to preserve their ABANEC argument for appellate review.

                                    27
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     In their reply brief, the Robersons contend that they preserved their

claim for court-ordered indemnification simply by alleging facts that they

say were sufficient to invoke the theory. They rely on this Court's

statement that, " ' "if under a provable set of facts, upon any cognizable

theory of law, a complaint states a claim upon which relief could be

granted, the complaint should not be dismissed." ' " Roberson v. Balch &

Bingham, LLP, 358 So. 3d 1118, 1126 (Ala. 2022) (citations omitted). But

the Robersons conflate the requirements for sufficiently pleading a claim

with the requirements for preserving for appeal a basis for reversing an

order dismissing a claim. To preserve a basis for reversing an order

dismissing a claim, a plaintiff must bring that basis to the trial court's

attention either in response to the motion to dismiss or in a postjudgment

motion. Allowing a plaintiff to assert a basis for reversal for the first time

on appeal so long as it satisfied the requirements for sufficient pleading

would violate basic principles of appellate procedure. Knox, supra.

                               V. Conclusion

     For these reasons, we affirm the order dismissing the Robersons'

indemnification claim.

     AFFIRMED.

                                     28
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      Mendheim and Stewart, JJ., and Baschab* and Welch,* Special
Justices, concur.

     Lyons,* Special Justice, concurs in part and dissents in part as to
the rationale and dissents from the judgment, with opinion, joined by
Main,* Special Justice.

    Shaw, Wise, Bryan, Sellers, Mitchell, and Cook, JJ., recuse
themselves.

____________________
      *Retired Associate Justice Champ Lyons, Jr., Retired Associate
Justice James Allen Main, Retired Judge Pamela Willis Baschab, and
Retired Judge Samuel Henry Welch were appointed to serve as Special
Justices in regard to this appeal.
                                   29
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LYONS, Special Justice (concurring in part and dissenting in part as to

the rationale and dissenting from the judgment).

     This case presents a remarkable assortment of shifting theories and

rationales. The trial court dismissed the indemnification claim asserted

by David Roberson and Anna Roberson on a ground not asserted in the

motion to dismiss filed by Drummond Company, Inc. ("Drummond"). The

Robersons, on appeal, assert statutory relief not raised below.

Drummond, on appeal, raises grounds not argued in the trial court but fails

to defend the ground actually relied upon by the trial court. The main

opinion affirms on a theory never raised below or on appeal by

Drummond.

      Drummond asserts for the first time on appeal that the effect of

David Roberson's conviction in federal court precludes him from

pursuing a civil action in state court seeking a result inconsistent with

the facts found in the federal criminal proceeding. In their reply brief,

the Robersons argue persuasively that Drummond is asserting for the

first time on appeal an issue that constitutes a waived affirmative

defense.    In fact, the Robersons contend that in the trial court

Drummond relied on authority that is inconsistent with its position on
                                    30
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appeal. The Robersons cite authority that prevents affirmance on a

waived affirmative defense. However, in this proceeding, the

obligations inherent in serving an answer, such as, among other things,

assertion of any available affirmative defenses, did not come into play

because the trial court dismissed the indemnification claim asserted in

the Robersons' third amended complaint, thereby eliminating the

necessity for Drummond to raise affirmative defenses to that claim in

an answer. For this reason, it would be inappropriate to affirm the trial

court's dismissal order on this ground.

     The main opinion addresses the ground for dismissal relied upon by

the trial court and agrees with the Robersons that the trial court erred

in overlooking common-law indemnity. I concur in that determination.

The main opinion then limits common-law indemnity to claims by the

indemnitee against the indemnitor for losses sustained as a result of

claims against the indemnitee by third parties, thus serving up an

additional basis for affirmance by stating that the Robersons point to

no authority finding a common-law duty to indemnify an agent from a

criminal indictment, conviction, or criminal penalty. On this theory, a

defense of estoppel, had it been asserted, would have been a defense to
                                   31
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the indemnification claim asserted in the third amended complaint. Of

course, neither of these contentions were asserted by Drummond in the

trial court or on appeal. With respect to contractual indemnity, the

main opinion again points to the unavailability of indemnity when the

losses are not triggered by liability to a third party.

     The Court requested supplemental briefing on a potential basis

for affirmance, namely, that common-law indemnity is limited to claims

by the indemnitee against the indemnitor for losses sustained as a result

of claims against the indemnitee by third parties. The additional

briefing was ordered due to the potential for the denial of due process

recognized in Liberty National Life Insurance Co. v. University of

Alabama Health Services Foundation, P.C., 881 So. 2d 1013, 1020 (Ala.

2003), wherein this Court affirmed the trial court's judgment on a

ground raised by the Court for the first time on appeal. The issue

whether indemnity is restricted to restitution for losses that the

alleged indemnitee, who was an employee of the alleged indemnitor,

was required to pay to a third party was not raised by the Robersons,

Drummond, or the trial court, either below or on appeal.

     In their supplemental brief, the Robersons point to the procedural
                                    32
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defect of Drummond's failure to attack the nature of recoverable

damages by proper motion below and also assert substantive grounds

for rejecting a restricted view of recoverable damages for indemnity

based on caselaw and an Alabama statute. Sorting through the details

of the procedural requirements of a challenge to damages by a

defendant and the substantive issue of the recoverability of specific

categories of damages under the facts before us, as well as applying the

precedents applicable to these issues cited in the supplemental briefs,

smack of functions that should initially be left to the trial court, with

one exception -- the determination whether, in considering those issues,

the Robersons should be permitted to rely on certain provisions of the

Alabama Business and Nonprofit Entities Code ("the ABANEC"), Ala.

Code 1975, § 10A-1-1.01 et seq.

     With respect to the appropriate procedural posture for a challenge

to damages, the Robersons cite Jefferies v. Bush, 608 So. 2d 361 (1992).

In that case, a defendant challenged the recoverability of a certain

category of damages at the trial level by moving to strike a request for

mental-anguish damages asserted in the complaint. After noting that

such a procedure was no longer appropriate after the promulgation of
                                   33
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the Alabama Rules of Civil Procedure, this Court observed that "the

proper vehicle for challenging a claim for mental anguish damages

would be a motion for partial summary judgment." Id. at 363. This Court

then reviewed the trial court's determination preventing the plaintiffs

from recovering mental-anguish damages by applying the standard

applicable   to a partial summary judgment. Of course, here, no motion

of any kind challenging the categories of damages sought was served by

Drummond below, so this Court cannot review any ruling on such a

motion simply by applying the proper standard, as was done in Jefferies.

     I am unable to conclude that the round of letter briefs on the issue

of the categories of recoverable damages for indemnity is an adequate

substitute for proceedings below on a motion for a partial summary

judgment. I therefore dissent from the main opinion's affirmance of the

trial court's order insofar as the affirmance is premised on the

unavailability of the damages sought by the Robersons under a claim

for common-law indemnity.

      Turning to the ABANEC claim, the Robersons assert it for the first

time on appeal, citing the opinion this Court released in an earlier

appeal in this case, Roberson v. Balch & Bingham, LLP, 358 So. 3d
                                  34
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1118 (Ala. 2022), as authority to do so, notwithstanding their failure

to assert it in their third amended complaint. The Robersons' reliance

on this Court's opinion in the previous appeal in this case is misplaced.

The operative complaint in Roberson explicitly charged common-law

fraud. The issue of the sufficiency of the allegations of the fraud claim

was thus addressed on appeal based on a record established in the trial

court, not on an allegation made for the first time on appeal.

      As for the ABANEC claim, as Drummond contends in its

principal brief to this Court, the Robersons

      "did not present this argument to the trial court. '[An]
      appellate court] cannot consider arguments advanced for
      the purpose of reversing the judgment of a trial court when
      those arguments were never presented to the trial court for
      consideration or were raised for the first time on appeal.'
      ... Therefore, we do not address that argument further."

 G.A. West & Co. v. McGhee, 58 So. 3d 167, 177 (Ala. Civ. App. 2010)

 (quoting State Farm Mut. Auto. Ins. Co. v. Motley, 909 So. 2d 806, 821

 (Ala. 2005)). See also Marks v. Tenbrunsel, 910 So. 2d 1255, 1263 (Ala.

 2005) (" 'This Court cannot consider arguments raised for the first time

 on appeal; rather, our review is restricted to the evidence and

 arguments considered by the trial court.' " (citation omitted)).

                                     35
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      The Robersons cannot circumvent this settled rule by arguing

that the trial court should have sua sponte analyzed Count 1 of the

third amended complaint as a statutory claim for court-ordered

indemnity. See McCullough v. Alabama By-Prods. Corp., 343 So. 2d

508, 510 (Ala. 1977) (citing Case v. State Farm Mut. Auto. Ins. Co., 294

F.2d 676 (5th Cir. 1961)) ("It is not the duty of the courts to create a claim

which the plaintiff has not spelled out in the pleadings."). And, the

Robersons' ABANEC claim is not a new argument of existing issues

related to common-law claims that were set forth in their third amended

complaint. I therefore concur in this aspect of the main opinion.

      In my opinion, however, the trial court's order should be reversed

and the case remanded for full development below of the issue

regarding the categories of recoverable damages under common-law

indemnity and any other issues stemming from service by Drummond of

an answer asserting applicable affirmative defenses.

      Main, Special Justice, concurs.

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