Court Opinion

ID: 45123
Source: CourtListenerOpinion
Date Created: 2010-04-25 22:33:07+00
Date Added: 2024-06-11T12:07:07.727081
License: Public Domain

[DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                   FOR THE ELEVENTH CIRCUIT           FILED
                    ________________________ U.S. COURT OF APPEALS
                                                        ELEVENTH CIRCUIT
                                                           OCT 19, 2006
                            No. 05-10117
                                                         THOMAS K. KAHN
                      ________________________
                                                             CLERK

                  D. C. Docket No. 02-00707 CV-PT-M

SAMARA CONSULTANT GROUP,
a corporation, A.M. SAMARA,

                                                    Plaintiffs-Counter-
                                                    Defendants-Appellees,

                                 versus

S & DAVIS INTERNATIONAL, INC.,

                                                    Defendant-Counter-
                                                    Claimant-Appellant,

ROY DAVIS,

                                                    Defendant-Appellant.

                      ________________________

               Appeal from the United States District Court
                  for the Northern District of Alabama
                     _________________________

                           (October 19, 2006)
Before ANDERSON and DUBINA, Circuit Judges, and VINSON,* District Judge.

PER CURIAM:

       Appellants, Roy Davis and Strickland & Davis International DISC

Corporation appeal the judgment of the district court against them. Several

concerns persuade us that the judgment of the district court should be vacated and

this case remanded to the district court for further proceedings.

       First, we are concerned as to whether appellants were afforded a fair

opportunity to defend against the imposition of a constructive trust as the recipient

of a fraudulent or otherwise wrongful transfer. It appears to us that the district

court in its November 17, 2004, order simultaneously vacated its prior orders

dismissing these parties from the case and entered judgment on the merits against

them. We are concerned that the due process considerations articulated in Nelson

v. Adams USA, Inc., 592 U.S. 460, 120 S.Ct. 1579 (2000), may have been

transgressed. In any event, we conclude that fairness requires that these appellants

be afforded a fair opportunity to be put on notice of the claim against them, adduce

evidence to defend against it, and submit both factual and legal arguments to the

district court in their defense.

       *
         Honorable C. Roger Vinson, United States District Judge for the Northern District of
Florida, sitting by designation.

                                                2
      Second, we are concerned that the district court never explained its rationale

for setting aside the previous judgments against appellants. Such decision and

rationale should precede the resolution of the merits of any claim against

appellants.

      Third, the Alabama law with respect to precisely what conduct will warrant

the imposition of a constructive trust is not clear to this panel in light of the

current briefing. Although far from clear, the magistrate judge implied that a

constructive trust may be warranted even in the absence of a fraudulent

conveyance or other wrongful conduct. If it were necessary to so hold, this court

may well deem it appropriate to certify that question to the Alabama Supreme

Court. However, such certification would be inappropriate unless we knew that

resolution of that question were absolutely necessary to resolve this case.

Accordingly, if the district court on remand imposes a constructive trust on either

or both appellants, the district court should describe fully the nature of the conduct

which warrants imposition of the constructive trust, as well as the court’s rationale

and authority for doing so.

      Although we have determined that it is necessary to remand this case for

further proceedings, and for elaboration by the district court, our actions should

not be construed as expressing any opinion on the merits. To the contrary, we

                                           3
express absolutely no opinion on the merits of any issue or on the appropriate

result for the case.

      Accordingly, the judgment of the district court is

      VACATED and REMANDED.

                                         4