January 2024 Judicial Update

January 2024 Judicial Update

Our state appellate courts issue opinions on a wide variety of topics almost every Friday. AAR’s Legal Team consistently monitors those opinions to provide you with a summary of the cases that could impact your business. Continue reading to learn about the decisions rendered in late 2023 and early 2024.


Dolgencorp, LLC v Gilliam

In this Alabama Supreme Court case, a woman sued a business after she was struck by a vehicle that went through the business’s storefront while she was shopping there. She argued that the store had a duty to exercise reasonable care in maintaining safe premises and that in this case, maintaining safe premises required them to erect barricades in front of the store to prevent vehicles from losing control and hitting the building. The Court agreed that the business had a duty to exercise reasonable care in ensuring the premises was safe. However, the Court reiterated an existing point of law – the duty of care only extends to protecting against reasonably foreseeable sources of harm. In this case, a vehicle coming through the storefront was not reasonably foreseeable, so the store had no duty to protect against it.


Dixon v City of Auburn et al.

The Alabama Supreme Court also considered Dixon v City of Auburn et al., a case which dealt with short term rental listings. In that case, a man purchased a home in Auburn in 2018, which he lived in as a permanent resident. He also rented the home’s basement out as a short-term rental property, doing so without having a license or paying taxes on the rental income. At the time he purchased the home, short term rentals were not specifically prohibited by law in his neighborhood. However, the neighborhood was zoned “NC,” meaning that no more than 2 unrelated persons were allowed to occupy each residence. A few years after the man purchased his home, the city banned short-term rentals in “NC” zoned areas. The man continued renting space in his home despite the ordinance and was eventually cited, convicted, and fined. The man sued and asserted several arguments. One of his arguments was that that because his nonconforming use of the property (that is, renting it on a short-term basis) predated the short-term rental prohibition, he had a vested right to rent the property, and not allowing him to do so violated his due process rights. However, the Court disagreed, finding that because he did not have a license for the rentals, nor did he pay taxes, it was not a lawful nonconforming use. He also argued that the City acquiesced to his renting out the property, but the Court disagreed, since the City had actively pursued a case against him due to the rentals. Ultimately, the Court found that the short-term rental ban was lawful and could continue.


Price v Alabama One Credit Union and Lunsford

This Alabama Supreme Court case deals with a piece of real property in Tuscaloosa that was purchased jointly by 3 individuals in 2004. Several years later, the third individual sold his share to one of the other partners, such that the purchasing partner then owned a majority of the interest in the property. The two remaining partners made a plan to sell the property to a new owner and the minority owner moved forward with selling his interest, but the majority owner did not. In actuality, the buyer had been working with the majority owner and the buyer subsequently transferred his shares to the majority owner, such that the majority owner became the only owner. The original minority owner, who believed both investors were selling their shares, sued the now sole owner for fraud and conspiracy. The case was eventually appealed to the Alabama Supreme Court, and ultimately the issue of whether the claims were time-barred by the statute of limitations was raised. The Court noted that under Alabama Code § 6-2-3, the statute of limitations “starts running when the plaintiff is privy to facts which would provoke inquiry in the mind of a person with reasonable prudence.” In this case, the closing documents from the original minority owner’s sale stated that loans were being made for one of the existing investors, rather than stating that the loans were being made for the new buyer. In the eyes of the Court, this was exactly the type of “inquiry-provoking” information that is contemplated by Alabama Code § 6-2-3. As such, the statute of limitations began running when the minority owner was presented with the closing documents.


T Investments v City of Montgomery

This case involves a proposed expansion of a Montgomery neighborhood. The proposal was denied, with the City Planning Commission citing drainage, safety, and a previously submitted plan that was incompatible with the new proposal as the causes for the denial. The investment company proposing the expansion appealed to the Circuit Court. Upon reviewing the record, the Circuit Court found that “drainage” and the previously submitted plan were insufficient bases for the Planning Commission’s denial, but that “safety” was a sufficient basis for denial. The investment company disagreed with the Circuit Court’s decision because the Planning Commission’s concern regarding “safety” was related to the lack of traffic study related to the proposal, but such a study was not required at that stage of planning. The investors appealed to the Alabama Supreme Court, and the Court sided with the investors. The Court pointed to Alabama Code § 11-52-30(a), which states that planning commissions have 30 days to approve or deny a proposal and that a denial must include reasoning. The Court elaborated that the reasoning must be both valid and sufficiently clear as to note the nature of the deficiency and the amendments necessary to cure such deficiency. Here, because the Planning Commission only gave the reason of “safety,” without elaborating on the nature of the defect or potential cures, the denial notice was insufficient under the law and the proposal was due to be granted.


Littlefield v Smith and Planet Home Lending, LLC

This Alabama Supreme Court case deals with a property, owned by the Littlefields, that was foreclosed upon by the mortgagee, Planet Home. The home was subsequently sold to bona fide purchasers for value, the Smiths. The Smiths filed an action against the Littlefields requesting that they be ejected from the home. The Littlefields argued that the foreclosure sale was not valid and asked the court to set aside the sale. The trial court ruled against the Littlefields, and they appealed to the Alabama Supreme Court. The Alabama Supreme Court affirmed the trial court’s decision, finding that even if the Littlefields’ argument were valid (a question which the Court did not ultimately consider), it only meant that the foreclosure sale was voidable, not void. Under Alabama law, “foreclosure sales that do not comply with the provisions of the mortgage . . . are voidable on direct attack” Littlefield at 7 (internal citations omitted). Moreover, Alabama law only allows voidable foreclosure sales to be set aside “if the property has not passed to a bona fide purchaser.” Id. at 8. In this case, since the home had passed to a bona fide purchaser, the foreclosure could not be set aside, even if it was voidable.


Brickhouse Capital, LLC v Coastal Cryo AL, LLC and Santa

This case involves a man who purchased a medical device for his business and signed the contract via Docusign. Prior to signing the contract, the man and the seller discussed the contract via telephone and a copy was sent to the man for review. When the man defaulted on the contract and was sued, he countersued for fraud, alleging he was deceived as to the terms of the contract. Although the man had been given a copy of the contract prior to signing it, he argued that he was not required to read the contract because it was sent to him via the electronic document management service Docusign. The Court flatly rejected the man’s argument. In Alabama, individuals who enter a contract, including e-contracts, have a duty to read and review it before signing, and failure to do so is insufficient to support a claim of fraud.  


Riley v Boles

The Alabama Supreme Court recently considered a case regarding prescriptive easements,Riley v Boles. In that case, Riley owned a property that had another property behind it, and Riley’s land contained one of a few different roads that could be used to access the other property. Beginning in the mid-1990s, a different man, Edmonson, used various roads to get to the property behind Riley’s land, including using the road on Riley’s land. In 2016, Edmonson wrote a letter to Riley formally requesting the right to use Riley’s road, but Riley never responded. A couple of years later, Riley visited his property, discovering that Edmonson had made some changes to it. Riley banned Edmonson from entering Riley’s land or using his road, but Edmonson continued. In 2021, Edmonson’s friend, Boles, purchased the property behind Riley’s property. Boles also used the road on Riley’s land to access Boles’ property and eventually attempted to obtain a prescriptive easement for use of the road. Although the trial court granted the easement, the Alabama Supreme Court reversed the trial court’s decision, ultimately denying the easement. To be granted a prescriptive easement, the requestor has to show that the easement has been in constant use for 20 years or more, and that such use is adverse to the true owner of the property. Here, Edmonson’s use of the easement was not “adverse” until 2016, clearly not meeting the 20-year requirement. Although different individuals’ use of the easement can be added together to satisfy the 20-year requirement in certain instances, they could not be in this particular case because Edmonson was never a holder of title to any property involved but just used the property.


Ex Parte Mullen

The Alabama Supreme Court also considered a case involving a claim of breach of contract (among other claims) related to the sale of a home. The case involved a very narrow question: does Alabama law require that actions requesting equitable relief and involving real estate be brought in the county where the real estate is located? Ultimately, the Court decided that Alabama law does indeed make such a requirement. Cases involving real property where the plaintiff is requesting equitable relief must be brought in the county where the property is located.