JANUARY 2016Lawyer | VOLUME 77, NUMBER 1

THE AlabamaJANUARY 2016Lawyer | VOLUME 77, NUMBER 1

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THE S E L C I T R A E R U T A E F 1 R E B M U N , 7 7 E M U L O V | 6 1 0 2 Y R A U N A J Small Firms Poised to Thrive in Today’s Legal Market Alabama Lawyer Alabama Minority Oppression in Limited Liability Companies: The Birth of a New Claim or a Hole in the Law? By Prof. Pamela Bucy Pierson andEmily Kornegay Price By Douglas B. Hargett andG.Bartley Loftin, III The Best “Buy-Sell” for Your Firm Honk if You Like the NewCover! By Jason S.Isbell andJeremy S. Walker Note from the Editor Eating an Elephant Fall 2015 Admittees By Daniel E. Drennen, II 12 45 36 30 20 14 of information technology –Photo byDolan L. Trout, ASB director 100, F/20, 35mm, 15secondexposure Shot taken with Canon7DMark II, ISO tacks in Paris onNovember 13,2015. show of solidarity after the terrorist at- nated in the national colors of France in a Dexter Avenue in Montgomery is illumi- The Court Square Fountain located on On On CoverThe Executive Director’s Report S N M U L O C ellate Corner The App Legislative Wrap-Up flickr.com/AlabamaStateBar youtube.com/TheAlabamaStateBar @AlabamaStateBar @AlabamaStateBar facebook.com/AlabamaStateBar Disciplinary Notices Important Notices About Members, General Counsel President’s Page Opinions of the Among Firms YLS Update Memorials 64 60 59 52 10 76 74 68 72 8 www.alabar.org 5 T H E Alabama Lawyer 6 T H E Alabama Lawyer January 2016 phrhWto ht a ...... 69 Upchurch Watson White & Max ...... 65 2AB, Inc. Mike Suttle Mediation...... 19 Stokes McNutt...... 29 Sirote Permutt...... 71 ...... 9 Professional Software Corporation ...... 75 OnBoard Search & Staffing ...... 3 Distinguished Neutrals National Academy of The Locker Room...... 11 LawPay Judicial Arbiter Group Freedom Court Reporting ...... 13 The Finklea Group J. Forrester DeBuys,III...... 9 Davis Direct...... 78 The Triangle ...... 9 Cain & Associates ...... 2 of the South Attorneys Insurance Mutual ...... 57 AlaServe, LLC ABA TechShow 2016...... 4 S R E S I T R E V D A ...... 7 by Teresa Cannady...... 53 ...... 63 ...... 79 www.alabar.org FAX (334) 261-6310 (334) 269-1515 •(800) 354-6154 Montgomery, AL 36104 415 Dexter Avenue ALABAMA STATE BAR Receptionist Paralegals/Investigators Client Security Fund Coordinator ...... 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Kelley Lee Manager Hunter Harris Information Systems Manager...... O. L. Director of Information TroutTechnology...... Dolan Administrative Assistants for External Relations Projects/Annual Butler Meeting...... Christina Rittenour Executive Assistant...... Ann ASB Foundation Assistant/ The Alabama Lawyer Administrative Assistant Administrative Assistant n rjcs...... Mary Frances Garner and Projects ...... Sherry Langley ...... J. Anthony McLain ...... Carol M. Wright ...... John E. Vickers, III ...... Jeremy W. McIntire ...... Mark B. Moody ...... Doris McDaniel ...... Kim Ellis ...... Cathy Sue McCurry ...... Julie Lee ...... Laurie Blazer Carrie Black-Phillips The Alabama Lawyer G N I T N I R P Marcia N. Daniel Sonia Douglas Robyn Bernier Carol Mott Sue Jones • 29 No. 1, Allan R.Chason,BayMinette; Place No.2,Sam W. Irby, Fairhope Holt, Florence •12 Hays Webb, Tuscaloosa •7 cuit, Place No.1, Terri Olive Tompkins, Tuscaloosa; Place No.2,Robert derburg, Pell City •31 Scottsboro •39 Loftin, Phenix City •27 1 ...... Young Lawyers’S. Hughston Nichols, Birmingham Section President ...... Secretary Keith B.Norman, Montgomery ...... Vice President R. Cooper Shattuck, Tuscaloosa ...... Immediate Past President Richard J.R.Raleigh, Jr., Huntsville J. Cole Portis, Montgomery...... President-elect Lee H.Copeland, Montgomery...... President Jason B. Tompkins, • Birmingham David G. Wirtes, Jr., Mobile ingham • Marc A. Starrett, Montgomery • M. Chad Tindol, •Montgomery TuscaloosaKatherine T.• Powell, Birmingham • Allison O. Skinner,tiel, Birm- Montgomery • Anil A. Mujumdar, Birmingham • SherrieMcLaughlin, L. Phillips, Guntersville • James R. Moncus, III, Birmingham • McGowan,Joi T. Mon-Tuskegee Rebecca Keith • McKinney, Huntsville • JeffreySara R. Anne Ford, • Birmingham Amy M. Hampton, Alexander • CityCasonMobile •Crosby Walter Cheely, E. Daphne • Kira Y. Fonteneau, • Birmingham Birmingham • Henry L. (Max) Cassady, Fairhope Jr., • W.well, Lloyd Fairhope Copeland, • Jennifer M. Bedsole, Birmingham • H. LanierMelanie Brown, M. Atha,II, Birmingham • Marc J. Ayers, Birmingham • David A. Bag- Linda G. Flippo, Birmingham Gregory H. Hawley, Birmingham advertisement. Copyright 2016. The Alabama State Bar. All rights reserved. offered. service or product any of endorsement imply necessarily not does herein publication but Counsel, Officethe General from ofapproval receive must and reviewed carefully is copy Advertising request. upon furnished be will rates Bar.Advertising State abama the of commissioners officersof editors,board of or board the ofAl- those sarily neces- not authors, the of those are herein articles in expressed conclusions and Lawyer Alabama The Circuit, Sharon Hindman Hester, Russellville •35 Circuit, Emily L. 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Periodicals postage paid at Montgomery, Alabama andadditional the Alabama State Bar, 415Dexter Avenue, Montgomery, Alabama The Alabama Lawyer Ashley Swink Fincher, Southlake, TX Dowdle Rasco,Huntsville •Monet McCorvey Gaines, Montgomery • Alicia F. Bennett, Chelsea •Kira Y. Fonteneau, Birmingham •Jeanne Meredith Shay Peters, Andalusia •RebeccaG.DePalma, Birmingham • Diandra S. Debrosse, Birmingham •R.Cooper Shattuck, Tuscaloosa • Malatia Glass, Birmingham •19 ingham; Place No.2,Mark S. Boardman, Chelsea; Place No.3, Anne 4, M.Clay Martin, Huntsville •24 Huntsville; Place No.3,RebekahKeith McKinney, Huntsville; Place No. No. 1, Tazewell T. Shepard, Huntsville; Place No.2,John A. Brinkley, 37 Chapman, Evergreen •36 Perry, Demopolis •18 Jason P. Knight, Cullman •33 verne •3 gory M. Varner, Ashland •41 Russell Garner, Selma •5 Margaret L. Murphy, Liaison and Montgomery...... Staff Wilson F. Green, Tuscaloosa BOard Of Bar COmmissiOnErs COmmissiOnErs Bar Of BOard OffiCErs EdiTOrs Of BOard aT-LargE BOard mEmBErs BOard aT-LargE st Robert A. Huffaker, Montgomery th th Circuit, Halron W. Turner, Chatom •2 th th Circuit, Roger W. Pierce, Auburn •38 Circuit, R.Cliff Mendheim, Dothan •21 Circuit, Steven D. Adcock, Talladega •30 Circuit, Donald R.Rhea,Gadsden•17 rd th Circuit, Christina D.Crow, Union Springs •4 th Circuit, Place No.1,Leslie R.Barineau, Birmingham; Place nd Circuit, J.Daryl Burt, Winfield •26 th Circuit, Manish H.Patel, Andalusia •23 Circuit, Donald BenMansell, Athens •40 th th is the official publication of the Alabama State Bar.the State of AlabamaViews publicationofficial the is Circuit, Place No.1,George R.Parker, Montgomery; Circuit, Thad Yancey, Troy •13 th (USPS 743-090) is published six times ayear by st Circuit, Place No.1, William Randall May, Birm- th Circuit, Tom Heflin, Tuscumbia •32 The Alabama Lawyer Alabama The th th Circuit, Clint L. 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AffiniPay is a registerc,d 150/MSP of BMO Harris Bank, N.A., Chicago, IL 8 T H E Alabama Lawyer January 2016 Lee H. Copeland can’t getmuchbetter thanthis! associations under500members. You tion 5,000 andtheTuscaloosa associa- Bar tions withmembersbetween 500and was awarded firstplace Countymontgomery association Bar sociations with5,000+members. The State Barwas awarded firstplace our barassociation levels. The Alabama the highestrecognition for allthree of Pro awards. Bono This year, we received age 24,hereturned to Montgomery, Once hegraduated from law schoolat appropriately namedHercules Street. Clinton. State Hillary tive Terri of Sewell andformer Secretary tional BarAssociation), U.S. Representa- Crump (presidentBenjamin oftheNa- ident BarAssociation), oftheAmerican Speakers includedPaulette Brown (pres- BaptistChurch. Memorial enue King ognized Av- inDecember at theDexter president ofourorganization, was rec- BusBoycott. Fred,gomery whoisapast part ofthe60 part ney Fred Gray was recently honored as fred gray their 7 tion recently released thewinnersof unnoticed. The BarAssocia- American bono events! Your have efforts notgone ofpro their generous andsupport spirit Pro Bono Fred onthe wasinMontgomery born Civil Rights leaderand Civil Rights Tuskegee attor- Congratulations to ourmembersfor was alsoawarded firstplace th Annual National Celebration of th Anniversary oftheMont- Anniversary E G A P S ’ T N E D I S E R P for barassocia- for bar for as- honors him. was well earned, andourbarlikewise practices. The recognition Fred received its agenciesto discriminatory correct suits againsttheState ofAlabama and have alongcareer filingdozens oflaw- senting Parks. Rosa Fred went onto where oneofhisfirstcaseswas repre- lunch at schoolno longerhave that. depend onaccess to breakfast and ships. Once schoolis out, children who from homes that experience food hard- one infour children inAlabama comes food assistance. Additionally, more than million Alabamians needsomeform of abama Legal Food Frenzy. More than1.8 agreed inthe2016Al- to beparticipants Attorney GeneralLuther Strange have Olens,Sam theAlabama State Barand Georgia andGeorgia’s Attorney General alabama food frenzy In conjunction withtheState conjunction Barof In This spring, the Alabama State Bar, Attorney General that fully or partially funds costs, so that each year it does not Luther Strange and the Alabama Food Bank Association will have to fight and claw for the necessary monies to operate. launch the Alabama Legal Food Frenzy. The event will be We expect proposals to be coming in the next month. held over a two-week period from April 25 through May 6. Law firms across the state will compete to see who can raise Voting the most food and funds for each of Alabama’s eight re- The Board of Bar Commissioners approved for an outside gional food banks. Beginning in March, your firm will have vendor to be hired to run and tabulate the annual elections the opportunity to register. Please check out http://allegal of the bar. This outside independent firm will be in place by foodfrenzy.org for details and updates. It is hoped that this the next election cycle. It is envisioned that this company will accomplish two goals: at a time when the food banks will send out the ballots for the presidential race, as well as traditionally run low, we can add to their inventories and the individual bar commissioner seats, and be responsible help increase awareness of this growing problem. for calculating the results. Court funding annual meeting Our bar is exploring ways to help our court system estab- Remember to mark June 22-25 on your calendar for this lish a long-term funding solution and has held meetings with year’s annual meeting at Sandestin Baytowne Wharf in Des- members of the supreme court and the legislature about tin. An array of exciting speakers has been lined up and I this. The goal is for the court system to have a mechanism hope to see you there! L

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www.alabar.org 9 10 T H E Alabama Lawyer January 2016 [email protected] Keith B.Norman T R O P E R S ’ R O T C E R I D E V I T U C E X E of the Bar Election Supervision Committee dates and campaigning, 3) restructuring time for publicizing president-elect candi- president-elect nominations, 2) earlier following areas: 1) earlier deadline for adopted by the commission, covered the streamline our election procedures. appropriate changes to update or last amended in 2010, and recommend to review the election rules, which were gaines Copeland commission. State bar the election of president-elect and the the state bar’s election rules that govern Board of Bar Commissioners amended Improved andStreamlined State Bar’s Rules Election Cole Portis Their recommendations, which were At its meeting this past November, the and staff member appointed , omsinrmonet Commissioner President-elect rsdn Lee President Justin aday event of a tie run-off election. method to determine the winner in the the voting periods shortened and 5) a and its scope of authority, 4) the length of verify theyare timelyfiled.) didates now have the responsibility to last Friday inApril, butcommission can- for commission races are stillduethe timely receipt by thestate bar. (Petitions bears theresponsibility to confirm its mailed oremailed, butthecandidate 1.Petitionsary may behand-delivered, deadline hasnow beenmoved to Febru- petitions was 5:00p.m. March 1. The candidates toelect filetheirnominating Elect nominations Earlier deadline for President- The previous deadlinefor president- now openonthethird Monday inMay andcloseat 5:00p.m. will andrun-offs. Elections andcommission elections elect ening thelengthofvoting to five days for bothpresident- Length of Voting Periods shortened committee’s hasbeenstreamlined. scope ofauthority five inthiscapacity. barmembersto serve Moreover, the barelections. tee supervised The president willnow appoint restructured Committee supervision Election Bar cannow beginpresident-elect February 1. each candidate’s information. Campaigning for theoffice of candidates. Barmemberswillalsoreceive anemailwith more timebefore begins period to consider theelection the azine andincludedonthewebsite aswell somembershave this information bepublishedintheMarch issueofthemag- campaigns onMarch 1. The newamendment requires that bar’s website. Likewise, candidates could commence their nounced intheMay issueofTheandonthe AlabamaLawyer Elect Candidates and Campaigning Earlier Time frame for Publicizing President- Perhaps themostsignificant rulechangehasbeenshort- Under theprevious rules, thestate barExecutive Commit- Previously, candidates whoqualifiedfor office were an- Montgomery, AL|334.262.1788 (more thanadecadeago) andisadministered by ourstaff. our current ballotingsystem, electronic whichwas designed moreminister efficiently elections andcost-effectively than because there are now anumberofproviders whocanad- tered by anoutsidevendor. This lastprovision was adopted also provides that ballotingsystem anelectronic beadminis- by at andrun-offs leasttwo andahalfweeks,elections butit week. thevoting for period The newrulenotonlyshortens in Juneandconclude at 5:00p.m. ontheFriday ofthat same the firstweek ofJune. Voting willbegin onthefirstMonday of May. When necessary, willnow beheldduring run-offs May 1)until after thethirdable (assoonaspracticable Friday loting remained openfrom theday theballotsbecameavail- on theFriday ofthatBefore sameweek. therulechange, bal- Copy-10-30-2015.pdf. .alabar.org/assets/uploads/2014/08/Election-Rules-Master- complete copyrules, pleasevisithttps://www oftheelection cycle. the 2016election To read ordownload andprinta this possibility. break thetie. An amendment hasbeenaddedto address or commission), theprevious ruleswere silent abouthow to Election run-off Tie determining Winner inEvent of Two Expertly Fitted Suits These changesare effective andwillbeimplemented for (eitherpresident-elect election atieoccurredIf inarun-off 1717 CarterHillRd. Mon-Sat 9am-6pm SUIT UP. www.TLRClothiers.com Two tropical-weightwoolsuitsmade with outstandingqualityanddetail, ideal foryear-round wear. Auburn, AL|334.321.4962 127 EastMagnoliaAve. Mon-Sat 10am-6pm www.alabar.org L 11 T H E Alabama Lawyer 12 T H E Alabama Lawyer January 2016 [email protected] Gregory H. Hawley New Cover! Honk if You Likethe 25 years. issuefor almost on every expertise who hasusedhercreativity anddesign Finklea Group, Inc.(www.taplink.com), orated withNoelleBuchannonof The with thisnewyear. course, Of we collab- Murphy andIsought afresh oneto go issue. The old look was fine, but Margaret and the regular columns featured in each for 2016,updating thelookofcover torial Board decidedto makeachange new dress, even iftheoldonestillfits. coat orwomen needa need anewsport didn’t notice. Sometimes, though,guys The samelogic applieshere. Your Edi- itwon’tOK, ourfeelings ifyou hurt R O T I D E E H T M O R F E T O N . Lawyer would liketo submitto The Alabama that you or thoughts aboutarticles torial Board ifyou have questions, ideas free to meoranyone contact ontheEdi- issue.)ments are Feel includedinevery from you.articles (Submissionrequire- that weknow are interested inreceiving goodtaste! his orherstylish your localEditorial Board memberfor now have inyour hands. Please thank whelmingly chosethecover that you to chooseanewdesign. The board over- Board three different from styles which While Ihave your attention, please Noelle, Margaret and I gave the Editorial L s T n E m E r i u q E r n O i s s i m B u s E L C i T r a of the author must be submitted with the article. in length, double-spaced, utilizing endnotes and not footnotes. ( previously appearing in other publications are not accepted. article submitted for publication. of all citations and quotations. The editorial board reserves the right to edit or reject any Alabama State Bar unless expressly so stated. Authors areare theresponsible authors’ only andfor are notthe to correctnessbe attributed to the publication in [email protected] Abrief biographical sketch and recenta color photograph (at least 300 dpi) All articles to be considered for publication must be submitted to the editor via email The Alabama State Bar members are encouraged to submit articles to the editor for possible Lawyer The Alabama Lawyer does not accept unsolicited articles from non-members of the ASB. Articles Design andMarketing Services 300 North Dean Road, Suite 5-193 • Auburn, AL 36830 AL Auburn, • 5-193 Suite Road, Dean North 300 334.799.7843 • • 334.799.7843 ) in Word format. A typical article is 13 to 18 letter-size pages Sales Support Material Product Packaging Print Ads Product Catalogs Brochures Websites Logos . Views expressed in the articles chosen for publication m o c . k n i l p a t . w w w Lawyer Professional Portfolios P.O.P. Displays Billboards Media Kits Publication Design Trade Show Exhibits , its editorial board or the www.alabar.org 13 T H E Alabama Lawyer 14 T H E Alabama Lawyer January 2016 A nancial-services advisors. the tool to put this plan into action, with the help of your tax andyour fi- funded with life insurance and/or disability-income insurance, canbejust plan properly before life-changing events occur. A buy-sell arrangement, have onthose whomost dependonthe firm. your business andminimizing the impact achangein ownership could tirement. Accordingly, it is important to plot acourse toward protecting can transition expectedly or unexpectedly through death, disability or re- your andyour family’s continued well-being. This is becausealaw firm ing andimplementing asuccession plan for the law firm is critical to E. II By Drennen, Daniel For Your Firm “Buy-Sell” The Best .What is the long-term impact onthe business? 4. .What is the 3. What are the short- andlong-term financial impacts onyourfamily? 2. the event it hasto be What is the liquidation value of the business in 1. These questions illustrate the critical needfor the owner(s) of afirm to Proper planning addresses anumber of concerns, suchas: full value for the transfer? erations andemployees? Will the transferring shareholder realize transferred to asuccessor without negatively impacting business op- its short- and long-term cash needs? Can the business even survive? family continue to maintain its standard of living? How will your family survive without the income? Howwill the alized in the event of aforced sale? sold under less than favorable circumstances? What value canbere- and support for your family. Understanding, realizing, develop- asset of your estate. It usually provides the majority of income n ownership interest in your law firm is often the single largest short-term impact on the business? Can the business meet Can the business be www.alabar.org 15 T H E Alabama Lawyer 16 T H E Alabama Lawyer Without abuy-sellagreement: Creditors may: Employees may: The deceasedowner’s heirsmay: Owners The Surviving Problems for January 2016 Heirs havelost the deceased • Heirs are left with • an asset of Tighten uponcredit because • Resign–further crippling• the Feel insecure andtheir morale • Call for liquidation if they • Threaten to, or actually sell to • Insist on dividends being paid,• Insist uponanactive role in • no income to replace it. owner’s salary, but will receive to sell at a distressed price. market, that they may be forced real value that has no guaranteed certain condition. of the firm’s weakenedandun- ment problems. firm, causing costly replace- productivity. may sag,along with their for the surviving owners. wealth-building opportunities loss of income-building and the loss of jobs aswell asthe can’t get their way–resulting in “outsiders.” firm’s ability to expand. tion and impairment of the which may cause double taxa- compatibility to manage. they havethe capability or management–whether or not and B, and their estates, to sell, and binding in that it obligates both A interests. Typically, the agreement is sale and purchase of their respective agreement with the business for the by A and B. They each enter into an assume a business is owned equally ers. To illustrate how it works, tween a business entity and its own- agreement is a legal agreement be- Two orMore Owners Agreements for Law Firms with Two Preferred Types ofBuy-Sell owners of the business. family and heirs, and the surviving This benefits the deceased owner’s his or her interest in the business. sure the prompt and orderly sale of owner dies, the agreement will as- Under this arrangement, when an ited liability company (LLC), etc. etor, corporation, partnership, lim- type of business entity: sole propri- agreements may be used by any or retirement of an owner. These the death,in disabilitythe event of lar ownership interest in a business and another party to buy a particu- tract that requires one party to sell agreement of a buy-sell agreement. can be minimized through the use Family Business and Protect Your 1. Entity Plan Entity 1. Heirs may encounter• delays in An entity-purchase buy-sell These undesirable consequences business. caused by attempts to sell the administration of the estate is a legally binding con- A buy-sell is called aliquidation of interest. In apartnership context, the plan as astock-redemption agreement. tion, the plan is generally known price. If the business is acorpora- centage amount of the purchase interests is increased bythe per- value of the remaining ownership terest of the deceasedowner. The uses the funds to purchase the in- by the business. The business then owner, the proceeds are received each policy. Uponthe death of an beneficiary andpremium payor of owner. The business is the owner, life insurance policy oneach insurance planfundedwithlifeEntity of them. disability or retirement of either one the business to buy, upon the death, carry out their obligations. ity or retirement. The trustee acts to ests in the event of a death, disabil- disposition of their ownership inter- owners that provides for the planned party (the trustee) and the business legal agreement between a third by the business. ceeds are received income-tax free the purchase price. Policy pro- remaining owners is increased by value of the interests held bythe Upon the death of anowner, the mium payment from the owners. thus removing the burden of pre- is responsible for the premium, fund anentity plan. The business ance policy per owner is neededto Advantages plan ofentity .Trusteed Cross-Purchase Plan 2. The business entity procures a A trusteed cross-purchase plan is a Generally, only onelife insur- total death benefit. The benefit is erally asmall percentage of the the cumulative premiums are gen- far below the purchase price, as of the premiums paid is normally funds whenneeded. The amount as it provides the business with the in funding abuy-sell agreement, Advantages oflife insurance ship interest. receive afair price for the owner- the business owner’s family will designed plan will guarantee that for the ownership interest. A well- the decedent’s estate in exchange ceeds from the insurance policy to ment, heor shedistributes the pro- the trustee. Pursuant to the agree- proceeds are received tax-free by them of the situation. The policy tify the remaining owners to alert of the owners, the trustee canno- funding problem arises with one to oversee the agreement. If a cross-purchase plan Advantages ofusingatrusteed exchange for the ownership interest. deceased business owner’s estate in and distributes the proceeds to the trustee collects the death benefit death of a business owner, the ums from the insureds. Upon the that the trustee collects the premi- policy. The agreement may provide be the owner and beneficiary of the lected. Typically, the trustee should party, a corporate trustee may be se- continued existence of the third insurance policies. To guarantee the pointed and acts as custodian of the funded withlife insurance Trusteed cross-purchase plan Life insurance canbebeneficial An impartial third party is used An impartial third party is ap- is not anissue. flect only the cashvalues, sothis surance in the buy-sell price, or re- agreements usually exclude life inof the decedent’s interest. Buy-sell will increase the estate-tax value the valuation of the business and the proceeds will beconsidered in absence of a binding buy-sell price, insured stockholder’s estate. In the plan is not directly included in the tion to fund astock-redemption funding Life-insurance the owner’s andfirm’s needs. insurance products exists to match under the agreement. A variety of is equal to the amount required owner and,if structured properly, paid onthe death of abusiness Insurance ownedbyacorpora- A well-designed fair price for the owner’s family guarantee that will receive a the business ownership plan will interest. ments for unstated goodwill. ordinary income, aswell aspay- ciated inventory may betaxable as ceivables andsubstantially appre- price allocable to unrealized re- gle partnership or LLC pot. the premiums come out of the sin- to evenout these differences since ate interests. An entity plan tends ages, insurability andproportion- traditional cross-purchase plan. cies per insured are neededwith a tity plan, whereas multiple poli- per insured is neededwith anen- not boundto continue asanowner. tion andthe decedent’s estate is tled to anaccounting anddistribu- LLC, the decedent’s estate is enti- ers will continue the partnership or providing that the surviving own- Dissolution canbeavoided by owners andthe decedent’s estate. cash andassets to the surviving debts andliabilities anddistribute collect accounts receivable, pay ers must wind upthe business, with anLLC. The remaining own- technical dissolution also occurs ship. Under Alabama law, this technical dissolution of apartner- pulsion) of anyowner causesa .Factors to Consider: Entity 3. In entity plans, the purchase Often there are differences in Only onelife insurance policy The death (or bankruptcy or ex- d)Partnership/LLC Income d)Partnership/LLC Agesand Ownership c) of Insurance b)Number Death of a a) Partner or LLC Redemption v. Cross-Purchase Taxed to the Decedent Interests of the Insureds Policies Member Dissolves the Entity www.alabar.org 17 T H E Alabama Lawyer 18 T H E Alabama Lawyer distributions from the corporation’s offset the accrued liability and pay the distributions. proceeds, noincome tax is dueon through the tax-free death-benefit long asthe loans are repaid mium to basis andpolicy loans. As withdrawals of cumulative pre- Cash value may beaccessible via earnings onthe premium deposits. with aprogram, including lost nity to recover all costs associated ford the corporation the opportu- efit proceeds. tax-free return through death-ben- basis. The useof COLI provides a cash value, onatax-deferred mulate anasset, in the form of it allows the corporation to accu- and nonqualified benefits because alternative for buy-sell funding (COLI) is anattractive investment cost-recovery solutions and provide: Utilizing life insurance may offer vide competitive benefit programs. ployees and enable your firm to pro- deliver on promises made to em- bility financing can also help you firm’s financial position. Benefit lia- pelling alternative to improve your owned life insurance (COLI) a com- investment options make corporate- death benefits and a wide range of COLI January 2016 Plans may book the cash value to Insurance-funding solutions af- Corporate-owned life insurance • • • Tax-deferred growth, tax-free tively impact overall financials. bility management that can posi- an efficient tool for asset-and-lia- an asset onyour balance sheet program liabilities gram andemployee-benefit- set employee-retirement-pro- a tax-efficient tool usedto off- account-balance liability. is able to book an asset to offset the tax-free death-benefit proceeds and ferred cash-value accumulation and ductible premiums, receives tax-de- achieves improved after-tax results. returns. Therefore, the corporation deferred growth and/or compound asset, and enjoys the benefits of tax- The full gain remains within the costs incurred with mutual funds. not need to pay the income-tax lation period, the corporation does ject to taxation during the accumu- fered within the variable products. mirror the returns of the funds of- participants’ investment choices can tion selected by participants. The closely match the investment alloca- ment performance of the funding to lish programs that allow the invest- insurance products, firms can estab- proceeds. By utilizing variable life through the tax-free death-benefit current cash, recouping the cost The corporation pays non-de- Since the cash values are not sub- COLI provides return through death-benefit The useof proceeds. a tax-free because it creates three advantages: COLI in their investment portfolios of insureds). policies (depending onthe number there are evenguaranteed-issue year. Underwriting is limited and crediting rate of interest in the first may evenexceedit baseduponthe close to the initial premium or value of COLI policies is usually the first year, the cashsurrender the cashsurrender value is low in the insured employee. these benefit plans over the life of and canbevery useful in funding cies are anasset of the corporation fare-benefit programs. These poli- benefit costs of their existing wel- or to help recover or finance the plemental executive benefit plan), implementation of aSERP (sup- poration in conjunction with the you-go or mutual-fund funding. vantageous over normal pay-as- cash surrender value, which is ad- insurance is usually valued at its tax-free death proceeds. The life company will ultimately recognize usually grows tax deferred andthe with after-tax money, but the cash employee. The premium is paid of alife insurance policy onakey the owner, payor andbeneficiary employee aspart of the coverage. benefits the employer offers the cies are taxed depending onthe centage basis andhowthese poli- people may becovered onaper- ability of the insured, howmany have changedwith regard to insur- asset. Over the last 10years, rules affirmed that COLI is auseful COLI recently, andCongress has Insurance companies now hold Unlike individual policies where Policies are purchased byacor- With COLI, the corporation is Much hasbeenwritten about ers seekto duplicate the current based-capital andtax status. Oth- significantly changetheir risk- highly-rated equities into COLI to companies move their more ing in COLI, some insurance vestments selected. When invest- “looks through” to the actual in- For separate-account COLI, one rated bondof a10-year duration. account COLI similar to ahighly icy assets are invested in equities. separate account is usedandpol- that issues the COLI, evenif the rating asthe insurance company account policy. It gets the same it is aseparate-account or general- rated bond,regardless of whether the same classification asatop- agencies place aCOLI policy in account policy. Insurance-rating is ageneral-account or separate- ing agencyandwhether the COLI afforded COLI dependsonthe rat- several money managers. in a number of asset classes with offers dozens of investment choices the claims of creditors and usually rate-account policy is not subject to the event of bankruptcy. A sepa- subject to the claims of creditors in eral-account policies are usually between three to four percent. Gen- account rates of return average surance company. Current general- upon the overall portfolio of the in- credits a fixed rate of return based of the insurance company, and policy invests in the general assets rate account. A general-account policies: general account and sepa- ance-sheet assets. and 3) the ability to reposition bal- capital, 2) favorable tax treatment 1) favorable impact to risk-based Standard andPoor rates general- The risk-based capital treatment There are two types of COLI Protection Act of 2006. which wascreated bythe Pension key people, is IRC Sec. 101(j), transaction, insuring acompany’s justification for this type of COLI assets to aminimum. The legal companies prefer to keephedging ment strategies, but insurance These include anyhedging invest- risk assessment than equities. assets that are treated with more balance sheet. There are classes of favorably reposition assets onthe of the owner. income onthe income statement They are, however, recognized as less the policy is surrendered. ing portfolio. debt-to-equity ratio of their exist- ance executive for 11 years. ment banker for 10years andaninsur- and Birmingham, andhasbeenan invest- 1980. Drennen practiced law in Mobile a memberof the Alabama State Bar since Daniel E.Drennen, II Endnote .The authorthanksJacqueline Ellisor Wiggins, JD, 1. COLI affords the opportunity to COLI earnings are not taxed un- Jack Burke, seniorintern, for editorial assistance. in buy-sell-agreement life insurance funding, and consultant, for theirinvaluable constant assistance ChFC and Cynthia Brodeur, CLW, advanced sales LLM, CLU, ChFC, Kathryn Wakefield, JD, LLM,CLU, School of Law. He hasbeen Law School and Emory University, Cumberland from Washington & Lee Birmingham graduated Daniel E. Drennen, II of L Mike Suttle Retired Circuit Judge 2600 SouthBridge Lauderdale/Florence 1984-2009 MikeSuttle.com Birmingham, AL Private Judge arbitration 205-414-7006 Mediation www.alabar.org 19 T H E Alabama Lawyer 20 T H E Alabama Lawyer January 2016 Small Firms Today’s Legal Market This article is dedicated to the memoryof ourgoodfriend, Tedford Taylor, By Prof. Kornegay Emily PamelaPierson and Bucy Price who sawthe future of the legal profession andknew it wasgood. Poised to Thrive in Models • T and solo firms. today presents unprecedented opportunities for small cellent attorneys at suchfirms, the legal profession need for large law firms andthe work of the many ex- small andsolo practices. While there will always bea focuses onthe opportunities uniquely presented to presents opportunities for all law firms. This article who donot will struggle. The changing legal market changes andadapt to them will thrive. Those changes. Attorneys whounderstand these oday’s legal profession is undergoing dramatic ates were plentiful and partnership positions less so. business model resembled a pyramid, where new associ- partners shared equally in the firm’s profits. The Cravath model, partners’ billing rates were roughly the same and associates who became partners. Under the Cravath ing with a firm as partners passed their clients on to the proven themselves. Clients were loyal to a firm, remain- the “golden key” to partner status after associates had ture, promote from within and reward its associates with new lawyers it could, train its new hires in the firm’s cul-New York attorney, a law firm sought to hire the bestUnder the “Cravath” model, named for Paul Cravath, a law firms from the late 1800s until the 21 And Starfish Pyramids, Diamonds The “Cravath” business model dominated American st century. www.alabar.org 21 T H E Alabama Lawyer 22 T H E Alabama Lawyer article addresses the startup checklist for anybudding support services. After reviewing whythis is so,this technology, cost savings andthe advent of multiple tices are poised to thrive in astarfish business model: tial in the legal market of today and the future. ness model is lean and nimble. Such versatility is essen- pyramid or diamond business model, the starfish busi- again when the firm needs these services. Unlike the “arm” of services, it “sheds” that arm, only to “grow” it an arm if it loses it. If a law firm no longer needs an firms. The starfish model is apt. A starfish grows back ice, administrative staff and paralegals and affiliate law non-equity partners, outsourced legal and support serving of associates and contract lawyers, of counsel and center of the starfish, and “arms” of the starfish consist- a starfish, with a small group of equity partners in the tiple staff designations, in the middle. at the bottom and a greater number of lawyers, of mul- of equity partners at the top, a small group of associates business model with a small group model gave way to the diamond lawyer. The stability of the Cravath senior associate, associate, contract non-equity partners, of counsel, tiers of staffing: equity partners, ties, law firms created multiple practice groups within a firm. in the profitability of lawyers and commoditized, leading to inequities value. Some practice areas became around among law firms for the best and, accordingly, began shopping outcomes and time-to-resolution billing rates, expenses, resolution clients could compare law firms’ scious. Because of available metrics, Clients became more cost-con- keeping more work in house. their in-house counsel offices and model. Businesses began growing erosion of the pyramid business several factors contributed to the January 2016 There are at least three reasons small andsolo prac- Today, the successful business model of law offices is In response to these market reali- Beginning in the 1980s and 1990s, offices is a starfish, witha offices isastarfish, of the starfish, and of thestarfish, “arms” of the starfish consisting of thestarfish counsel and non-equity service, administrativeservice, business modeloflaw and affiliate law firms. partners inthecenter partners small group ofequity partners, outsourcedpartners, Today, thesuccessful staff andparalegals contract lawyers, of legal and support legal andsupport of associates and opened his practice, Price Armstrong LLC: model. As noted by Oscar M. Price, IV, who recently small and solo firms to embrace the starfish business salary structures, small firms can support complex cases space, payroll, unprofitable practice groups and lawyer into high overhead costs resulting from expensive office such comparisons. Whereas larger firms are often locked lutions and time-to-resolution. Small firms can excel in compare law firms on billing rates, expenses, case reso- cause of cost and efficiency metrics allowing them to legal services. They need to do so and are able to be- Cost Savings Clients increasingly shop around for the best value in fessional and do a very good job for your client.” it’s ever been to go out on your own, be very pro- rooms or a library full of books. It is easier than of staff, a big office space with a lot of conference the technology for your firm, you don’t need a lot “If you take the time on the front end to set up support staff. Technology enables overhead expenses and salaried the next case, unencumbered by complete, a small firm can pivot to document analysis. When a task is with other firms and outsourcing ating work-sharing arrangements hiring remote contract lawyers, cre- can accomplish complex tasks by age and document-sharing, a firm firms. Utilizing cloud-based stor- sively were the domain of large cases that previously and exclu- tices to handle large and complex possible for small and solo prac- port services, technology makes it platforms and “back office” sup- storage, e-discovery, social media Technology resources available. small or solo firm andhighlights With the advent of electronic 1 safer than humans canpossibly provide. ment analysis faster, cheaper, more accurately and cated predictive analysis programs that perform docu- has led to the growth of specialty firms with sophisti- practice in many cases. The needfor suchproduction can market herself as effectively as the largest law firm. nationwide. With such access, a savvy solo practitioner phisticated websites and reach out to potential clients media platforms allow firms of any size to create so- for Westlaw or Lexis and armies of associates. Social only by large law offices with their unlimited budgets and in-depth research that previously could be done allow even the smallest firm to conduct sophisticated Internet and free case law databases like Casemaker and solo firms to compete as never before. Access to the Support Resources excellent service.” ble. They’re able to use rate flexibility, and still provide smaller firms: “Small firms, in general, are more flexi- when discussing AIG’s decision to leave large firms for Inc., for example, spoke of small firms’ rate flexibility eral counsel for American International Group (AIG), for a fraction of such rates. Eric Kobrick, deputy gen- firms where attorneys can deliver high quality service torneys charge a high billable hour rate with smaller “ramp up and ramp down” depending on case load. with lower overhead cost and their greater ability to away by sending all their work to big firms.” had “come to think that they were throwing money retaining smaller firms, noting that corporate counsel by and for corporate counsel, reported on the trend of small firms and solo practitioners on topics including Laura Calloway, provides innumerable resources to help ment Assistance Program and (PMAP) its director, their manpower bandwidth. take oncomplex casesthat previously were beyond ument analysis allows law firms of almost anysize to have handled in the past. The ability to outsource doc- law firms to handle complex casesthey never could of suchfirms has,in effect, made it possible for small Today, production andanalysis of metadata is abest The advent of available support resources allows small Clients can, and are, replacing large firms where at- The Alabama State Bar, through its Practice Manage- 2 Corporate Counsel , a publication 4 The growth 3 Check List Law Firm Start-Up follow the name? A law firm may simply obtain a afirm nameandCorporate select 2. “firm ambiance” statement. as a core services statement, a target market plan and a aClear Establish Vision 1. tice. adequately prepared to launch and establish a law prac- to the future,” and informs the bank that a practitioner is before” a firm opens its doors, as it is a firm’s “roadmap cessful business should be planned out on paper well marketing plan.” your financial plan, your management plan and your and include “a general description of your business, organized summary” of a firm’s mission and strategy budding small andsolo firm’s startup checklist. on issues of law and office management. lawyers consult with each other (almost in real-time!) of the equivalent of a virtual statewide law firm as section’s listserve provides the mentoring and guidance State Bar created the Solo & Small Firm Section. The vide the bedrock for establishing a successful practice. uncertain early days, maintaining a clear vision will pro- be tempting to welcome any and all work in a practice’s temptation to deviate from the firm vision. While it may developing referral relationships. Firms should resist the aids in securing capital, creating effective marketing and negotiated for ASB members). well as recommended resources (often with discounts fees, avoiding conflicts of interest and budgeting, as setting up a law firm, managing a practice, establishing program’s lending library. step software package and innumerable resources in the to Creating a Business Plan” which includes a step-by- plan, the state bar’s PMAP provides a “Lawyer’s Guide Of course, afirm needs aname–but what letters to A firm needs a clear, concise mission statement as well Listed below are 10topics that should beonevery Law practice management experts 8 model A law firm business plan should be a “concise and 9 To assist in formatting a business 6 Focusing a firm’s practice 5 In 2015, the Alabama 7 note that “a suc- www.alabar.org 23 T H E Alabama Lawyer 24 T H E Alabama Lawyer pensation issues and structure, methods and termining rights of survivorship among partners, com- fit your situation. Issues to beaddressed include de- attorney to determine which corporate model will best pertise, it is wise to consult with anaccountant or tax applicability pension benefits), these benefits often are of limited benefits ( lawyers in the firm…” liability for the professional negligence of other affords some level of protection against the vicarious immediately supervises, [the corporate organization] professional negligence or that of lawyers heor she a lawyer from personal liability for his or her own exist asasolo practice. While “noentity form shields federal “employer identification number” (EIN) and generate tax liability. main aPC since conversion to another structure could if afirm is already in aPC, it likely will want to re- structures are viewed aspreferable to PCs. and movement of lawyers within it, these business flexibility in the financial management of alaw firm tax characteristics andpersonal liability protections. including Alabama, afford LLCs andLLPs the same statutes havefallen from favor, andnowmost states, personal liability protections, but partial-shield LLP ences between the LLC andLLPs structures involving corporate formalities that must be observed. tied to ownership rather than performance and complex shareholder status, compensation that generally must be cedures necessary to transition lawyers to and from a firm evolves, including arduous stock redemption pro- tionally the most popular. model available to law firms, and, accordingly, tradi- fessional corporation model was the first corporate a limited liability limited partnership (LLLP”). The pro- ration (“LLC”), (3) a limited partnership (“LLP”) or (4) sional corporation (“PC”), (2) a limited liability corpo- must determine howbest to incorporate. and growing entity. that may become cumbersome and difficult in a small grams, it requires management of compensation flow savings on payroll taxation and funding retirement pro- January 2016 Unless business andtax law are your areas of ex- By contrast, while LLCs andLLPs lack some tax In Alabama, a law firm may exist as: (1) a profes- i.e., regarding payroll taxes andfunding of 14 and, becauseLLCs andLLPs provide 12 Moreover, a PC can pose issues as 16 10 Historically, there were differ- 11 To obtain this protection, one While a PC allows some tax 13 15 However, 17 advance payment for legal fees not yet earned. vided and distributed between the lawyer and client or proceeds or damage awards that have not yet been di- deposits, down payments for loan closings, settlement tion. Examples of such funds include earnest money client or third party in connection with legal representa- account to hold any money received on behalf of a duct multi-stage goals (one-, two- and five-year projections). projected overhead costs, expected income streams and ment and a business plan in which you describe your meeting is essential. You will need a clear mission state-ther a loan or a line of credit. Good preparation for this penses, you likely will need to approach a bank for ei- saved sufficient funds to pay overhead costs and case ex- investing in a law firm. Accordingly, unless you have Professional Conduct cure capital. Rule 5.4(d) of the generating book of business, you likely will need to se- secure Capital andCreate iOLTa 3. be anecessary part of your start-up costs. lenges, agoodaccountant, while anexpense,should share in the firm. To adequately assessthese chal- other partners to “buyout” the deceasedpartner’s needed in the event of death of onepartner that allows ganization, personal liability andinsurance coverage procedures for moving partners in andout of the or- terest proceeds; however, all attorneys are required to sum, and in that instance, the client is entitled to the in- count for a client for whom he is holding a significant tion. An attorney may elect to create a separate trust ac- Law Foundation or the Alabama Civil Justice Founda- The interest or dividend proceeds benefit the Alabama deposit short-term funds for clients or third persons. an interest- or dividend-bearing trust account used to and maintain an IOLTA account. An IOLTA account is the Securities & Exchange Commission. ment or an open-end investment company registered by ation whose deposits are insured by the federal govern- Rule 1.15 defines as a bank or savings and loan associ- account must be held by an “eligible institution,” which Rule 1.15 of Unless you intend to start with an established, income- Rule 1.15 also requires that all attorneys establish requires that a lawyer maintain an attorney trust account the Alabama Rules of Professional Con- prohibits an outside investor from Alabama Rules of 18 The liability-insurance. management-assistance-program-pmap/professional- www.alabar.org/programs-departments/practice- does provide alist of professional liability carriers at dorse aspecific professional liability carrier, but it ( insurance andhasanapplication on their website ISI Alabama offers brokerage of professional liability tice insurance, it is, of course, abest practice to doso. membership/member-benefits website, pected loss of firm member. See ISI Alabama’s tion a small firm must consider in case of the unex- Voya Financial, association life insurance plans, an op- dential Financial, Inc. ISI Alabama also offers, through overhead expense disability coverage–all through Pru- coverage, long-term disability insurance and business age, guaranteed issue comprehensive accident cluding accidental death and dismemberment cover- Alabama offers accident and disability insurance, in- plan and discount prescription cards. Additionally, ISI Alabama can procure individual policies, a firm group ance policy for small firms or solo practitioners, ISI While the state bar does not offer a group health insurance Specialists, Inc. (doing business as ISI Alabama). gests contacting independent insurance broker Insur- www.healthcare. gov age available and possible costs, first go to be easily andcost-efficiently accomplished. ity andmalpractice insurance onthe openmarket can With alittle effort, however, obtaining health, disabil- potential small/solo practitioners. pensation packageunnerves many surance benefits portion of acom- Procure Health and 4. 2014/08/BP-PMAP-AMB-TAH.pdf. at mation, see the article on the topic Alabama State Bar. For more infor- certify yearly its maintenance to the maintain an IOLTA account and www.isi1959.com). In addition, the ASB doesnot en- While anattorney is not required to carry malprac- To gain a general idea of the health insurance cover- The notion of abandoning the in- www.alabar.org/assets/uploads/ malpractice insurance www.isi1959.com . The Alabama State Bar also sug- , as well as for more information. www.alabar.org/ firms thatfirms seekto providing quality powerful tool forpowerful efficiency while efficiency achieve greater Technology isa representation. cost of anon-site receptionist.” tionists [with] top-notch service at afraction of the provides a“bright, friendly team of live virtual recep- phone system suchasRuby®Receptionists, which recording messages. Or, onemay opt for avirtual terminating access to cloud storage documents once an crypting emails that refer to cloud-stored documents); ing files before they are loaded into the cloud (and ening server andthe staff required to maintain it. based storage that eliminates the needfor a space-eat- hackers, aswell asdata encryption–all within cloud- it, provide data protection from online threats suchas management software program Clio, andothers like plies to digital information aswell. and it is nowcommonly accepted that this duty ap- “information relating to representation of aclient,” fessional Conduct information. Rule 1.6(a) of the Alabama Rules of Pro- sential for asmall firm to protect its data andclient tional support staff. Moreover, goodtechnology is es- without committing to the long-term expenseof addi- to elevate itself andbroaden its work capabilities while asignificant initial expense,canenable afirm representation. Investing in excellent technology, achieve greater efficiency while providing quality of spaceto housethem. form, will also saveprinting costs, aswell asthe cost Maintaining casefiles digitally, rather than in paper rather than printing them, will savein printing costs. habit of reviewing documents onacomputer screen, Best practices for secure cloud use include: encrypt- Technology is apowerful tool for firms that seekto prohibits alawyer from revealing tionist–and just aseffective at is far less expensive than arecep- phone system, while less personal, For example, anautomated tele- “trappings” that larger firms enjoy. hard questions, andforgoing the tice. This step may require asking you establish andgrow your prac- best allocate limited resources as you will needto determine howto invest resources determine Where to 5. As with anystartup business, 19 Likewise, making a 20 Law practice www.alabar.org 25 T H E Alabama Lawyer 26 T H E Alabama Lawyer your firm high onthe Google results page. of your daily routine to keep your content fresh and media platforms are established, update them as apart bargain for afirm. Onceyour website and social dents, working part-time while in school, can bea a site. Law schools are full of suchtalent, and law stu- student with awebdevelopment background to build savviness prohibits this option, consider hiring alaw of the cost of hiring awebdeveloper. If time or tech- maintain aprofessional-looking website for afraction Rapid Weaver to build asite. If youare able to invest the time, and maintain. Fortunately there are alternative ways easy-to-navigate website canbeexpensive to build small/solo status. Of course, anaesthetically pleasing, accounts canelevate your firm well beyondits connects your webpagewith Facebook and Twitter smartly executed social media marketing plan that izer for the small firm. A well-designed website anda Builda Website and 6. Small-Firms.pdf loads/2014/08/Budgeting-Tips-for- budget at consider when drafting a law firm Program provides other helpful tips to or eyescan). fingerprint, voice or facial recognition metric access(password plus stricted to aparticular device) or bio- protocols (password plus usere- ering two factor authentication member me” onyour devices; consid- than simply exiting); not selecting “re- when finishing acloud project (rather from cloud to device); logging off rity (such aslimiting transfer ability venience tools that compromise secu- has accessedyour data; avoiding con- ports (from your cloud company) who taining (and reviewing) periodic re- individual nolonger needsaccess; ob- January 2016 The Internet andsocial media canbeagreat equal- The Practice Management Assistance Create a Web Presence www.alabar.org/assets/up 21 is anexcellent program to build and . smartly executedsmartly small/solo status. elevate your firm A well-designed marketing plan marketing well beyond its with Facebook your webpage website anda that connects accounts can social media and Twitter software available for all of these needs. Program provides a listing and summary of features for of the firm. The ASB Practice Management Assistance you to store, edit and share documents within members technology tools is a must–practically, andethically. to become proficient at using it. A comfort level with and housediscovery documents. a practice would otherwise require to review, organize long term than the additional associates, staff or space ices canbeexpensive, but prove less costly in the larger firms. Document hosting andproduction serv- and ease,minus the expensive manpower required by produce, search andreview documents with speed services like it, allow small andsolo firms to store, als andseveral subscription options. Logikull platform. Logikull need to subscribe to aweb-based document-hosting and review of large numbers of documents, youwill ing. If your practice includes the production, storage Whatever software your firm chooses,take the time One potential expenseto consider is document host- is agoodchoice andoffers free tri- upgrades) program that allows or inexpensive (depending on ing expenses. aids with accounting and track- reports and more. rity and encryption, productivity timekeeping, billing, data secu- with tools for file organization, practice management program Clio as domain name, if available. lows you to use your firm name a good email platform that al- with each other. these tools need to integrate on your practice)–and all of document hosting (depending software, document storage and email, billing and accounting age your practice, including you need the right tools to man- utilize Practice 7. As a small/solo practitioner, management Tools is an excellent general Dropbox 22 Google Mail Quickbooks , and is a free is a bank of law forms. discussion list and other networking opportunities and education courses and technology training, an email firm attorneys. The section offers low-cost continuing to promote participation in state bar activities by small tion to remain competitive. Sam Crosby, afounding Optimize theflexibility smallfirms 9. portunities specific to small and solo practitioners and firms, to provide a forum to address problems and op- facilitate statewide networking for members of small State Bar established the Solo & Small Firm Section to and participate in the section’s activities. The Alabama sections of the state bar relevant to your firm’s practice, symbiotic referral and work-sharing arrangements. Join or complementary to your firm’s target area to build ships with other lawyers who practice in areas similar leagues to your firm and its mission. Develop relation- Consider hosting an open house to introduce local col- pivot to something else when those tasks are complete. gether to complete larger tasks, but remain nimble and model. Affiliate arrangements allow firms to come to- tions are a key component of the starfish business cases by working with other firms. Such firm affilia- develop affiliation, Work-sharing 8. file is corrupted, or … office damaged or destroyed.” store data in casethe lawyer’s computer crashes, the another computer or media that canbeaccessedto re- electronically stored files must bebackedup“onto walls andintrusion detection software,” andall ment[s],” including necessary “installation of fire- the confidentiality, security andintegrity of the docu- and reasonable measures must bein place to protect records maintained electronically “must besecured cally valuable property”) cannot bedestroyed; all electronic format, some paper documents (“intrinsi- 2010-02 notes that whenpaper files are converted to storage andprotection of client files. Ethics Opinion garding client files pertains to electronic retention, Alabama Rule of Professional Responsibility Small firms make it easier for law firms to transi- Today, small law firms can handle large complex Provide to Change withthemarket and referral relationships 24 1.15 re- 23 explains: need to remake themselves andtheir firms. Crosby business litigation. As practice areas dry up,lawyers economic development andlitigation andprobate and estate development, residential bankruptcy and,now, sation andautomobile accident representation, real tices asneedsarose–into plaintiffs’ workers’ compen- does “zero” suchlaw) andtransitioned to other prac- offices, usedto practice in oil andgaslaw (and now plains howhis firm, nowwith 13attorneys in three and Alabama State Bar president in 2007-2008, ex- partner of Stone, Granade & Crosby PC of Daphne, that of his partner to opentheir ownfirm: Nicholas W. Armstrong explained his decision and overhead andhowthey will spendtheir time. they will work with, howmuch they want to spendon back onthe workload, ramp upthe workload, who cide whether to take ononecaseversus another, cut trol over their lives. Lawyers in small firms cande- Let Your Priorities inLife guide 10. A small or solo practice allows lawyers more con- turn the QueenMary than asmall boat.” the public andyour community. It is harder to make the changesneededto meet the needsof vantageous to bein asmall firm andbeable to the marketplace, andalso provide value. It’s ad- remake yourself asalawyer, becompetitive in up our firm the waywedid.” made this choice to work for ourselves and set care of my kid. That is oneof the reasons we But it also means that if my kid is sick, I cantake and that requires ahigh level of commitment. life. We get our work done,andwedoit well, own practice allows usto prioritize our family than someone else who’s wrong. Setting upour trating whenyou’re the onewho’s wrong rather much stress. You’re in charge andit’s less frus- You work alot of hours. But youdon’t haveas “Without question it is important to beable to “Starting your ownfirm involves alot of risk. Your Practice 26 25 www.alabar.org 27 T H E Alabama Lawyer 28 T H E Alabama Lawyer Endnotes never will. The late Tedford Taylor said it well: thing hasnot changedabout the practice of law and of law office in which onepractices, however, one market. This is anasset. Regardless of the type or size quickly to changesin workload andtrends in the legal are small andnimble, suchfirms are able to respond sion brings to small andsolo practices. Becausethey focused onthe advantages today’s fluid legal profes- It creates peril for those whodonot. This article has who understand the changesafoot andadapt to them. struction. It creates opportunities for those lawyers Conclusion 10. Martin-Rhodes, Allison, Robert Allison, Robert W. Martin-Rhodes, Hillman,andPeter Tran. Law Firms’ Entity 10. 16. 15. 14. 13. 12. 11. January 2016 6. 9. 8. .A.Clay III,What Every Rankin, Litigator Needs to Know usingWeb-Based About 4. 3. .Javier Lavagnino, 2. 5. .Bilinsky, Dave7. and Dan Pinnington, “ .See Oscar M. Price1. IV, BBL Interview Video Library, Today’s legal market is in astate of creative de- program-pmap/ Successful and Profitable Practice See Choices ofNewer Appeal Forms Business Reflect , B Id. 2015). http://apps.americanbar.org/lpm/lpt/articles/fin07071.shtml#bio Law Firm Costs makes me feel goodabout what I do.” can take that problem andresolve it is what times they’re simple problems but the idea that I bigger than anything they’ve dealt with. Some- lem. It’s bigger than they canfix. It’s probably Id. Id. Id. Id. at 21. Id. Id. Electronic, 75 Review Services Document T Id. (visited October 31, 2015). https://www.alabar.org/programs-departments/practice-management-assistance- www.practicepro.ca/practice/PDF/BusinessPlanOutline.pdf. at 20. “When people come to me they haveaprob- www.alabar.org/assets/uploads/2014/08/New-Office-Checklist.pdf. , I . N HOUSE: T Corporate Counsel Facing Budget Cuts and Need to Address Outside HE F INDLAW , L AW A Business Plan and Budget: The Foundation of a P C RACTICE OPORATE HE T A ODAY C LABAMA OUNSEL http://www.law.ua.edu/BBLvideos (2007) American Bar Association, USINESS L B AWYER LOG E , NTITIES http://blogs.findlaw.com 36 (2014). 27 (visited October 20, 18 (2014). L . Emily Kornegay Price Prof. Pamela Bucy Pierson 7 See Tedford Taylor,27. BBL Interview Video Library, Nicholas See W. Armstrong, BBLInterview Video Library, 26. See Samuel N.25. Crosby, BBL Interview Video Library, www.alabar.org/membership/sections/ See . 24. Alabama State23. Bar, Office of General Counsel, Ethics Opinion 2010-02 22. 1 Donna Lee Elm and Sean 21. Broderick, 0 Ries, David G.,Safeguarding Confidential Your Data: Ethical andLegal Obligations,” 20. 19. Calloway, Laura, Trust Accounting for AlabamaAttorneys, 18. 17. BBLvideos. bar.org/resources/opinions/2010-02/. program-pmap/. for the Solo and Small Firmfor andSmall theSolo Lawyer, C 36 L practice-management-assistance-program-pmap/ Resources for Starting a New Practice uploads/2014/08/BP-PMAP-AMB-TAH.pdf. Assistance Program, Alabama State Bar. 2013.www.alabar.org/assets/ December Id. https://www.alabar.org/programs-departments/practice-management-assistance- AW P RACTICE and practiced in general civil defense litigation. strong, she clerked for the Honorable Abdul K. Kallon LLC in Birmingham. Prior to joining Price Arm- Emily Kornegay Price practices with Price Armstrong Business of Being a Lawyer Portions of this article are based upon her book, fessor of Law, University of Alabama School of Law. Pamela Bucy Pierson is the Bainbridge Mims Pro- : T HE B SNS OF USINESS P RACTICING , 5, Cloud Computing, Storing and Sharing: Guidance https://www.alabar.org/programs-departments/ RIMINAL L AW J 49(2010). , USTICE http://www.law.ua.edu/BBLvideos http://www.law.ua.edu/BBLvideos , 4–8(2015). . (West Academic 2014). Practice Management http://www.law.ua.edu/ https://www.ala The . . Advertising Momentum for Your Firm We Will Grow Your Firm.

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[email protected] Mobile: (404) 775-0194 Office: (334) 332-8340 stokesmcnutt.com Toll Free: 1-844-7Stokes 30 T H E Alabama Lawyer January 2016 Eating an Elephant

By Jason S. Isbell and Jeremy S. Walker

AAR, the 2015 session of the Ala- bama legislature “took one bite” Introduction by overwhelmingly supporting a “When eating an elephant,” the measure that halved the redemp- saying goes, “take one bite at a tion period for properties meeting time.” Historically, Alabama law a specific, narrow definition. This has granted to numerous interested measure, now Act 2015-79, also parties the right to redeem certain added a notification requirement to pieces of sold real estate within the redemption law for the mort- one year from the date of the sale.1 gagee who forecloses on property Parties with such rights under Ala- fitting this definition. To prepare bama law range from the devisee practitioners for these changes, of a debtor to the transferee of a which became effective on January judgment creditor. In recent years, 1, this article provides historical professional trade associations background into how the final leg- such as the Alabama Bankers As- islative product was crafted, dissociation (“ABA”) and the Ala- cusses the data used to drive the bama Association of Realtors legislative debate, includes a prac- (“AAR”) unsuccessfully lobbied tical discussion of the new law’s the Alabama Legislature to reduce requirements and gives several this redemption period. Eating the policy justifications for how reduc- entire elephant was unworkable. ing the redemption period will potentially benefit all parties in the

Driven by industry data, and at Alabama Lawyer the urging of the ABA and the real estate transaction. T H E

www.alabar.org 31 32 T H E Alabama Lawyer real estate loans. Opponents relied increased real estate sales and more demption periods could lead to tion period because shorter re- AAR sought to reduce the redemp- sides of the issue. The ABA and understand the arguments on both and, in the end, helped them better fresh in the minds of legislators redemption period kept the idea discussing legislation to reduce the sation going. The annual ritual of failed to pass, they kept the conver- gage.” trust, or power of sale in a mort- chancery, or under any deed of or by virtue of any decree in tate that was “sold under execution, a debtor’s ability to redeem real es- state legislature enshrined in statute 21 years old when, in 1842, the Background Historical year, tion period from two years to one ture, in 1969, shortened the redemp- years before the Alabama Legisla- out of its house of origin. and none of the bills ever made it the length of the redemption period, troduced that would have reduced regular session, five bills were in- lature immediately prior to the 2015 ular sessions of the Alabama Legis- 2015 session. In fact, in the six reg- tempts to change the law until the demption period blocked all at- period, opponents of a shortened re- reduce the length of the redemption sociations remained motivated to the ABA, AAR and other trade as- shortened to six months. Though riod was, for certain properties, until, in 2015, the one-year time pe- January 2016 Although the earlier attempts The State of Alabama was barely 3 and yet another 46 years 2 It would be another 127 4 was not working. step with the rest of the country and abama’s redemption law was out of data showed quite clearly that Al- one-year expiration. On this point, deem his or her property before the major financial windfall and re- foreclosed would come across a owner whose property had been slim chance that an original home- redemption period preserved the nents also believed that the longer period. On the other hand, oppo- than he or she did over a six-month investor over a 12-month period chance of finding a project-saving for example, had a doubly better short-on-cash real estate developer, sure or buyout discussions. The especially in commercial foreclo- frame was a useful bargaining chip, nents argued that the extended time status quo: On the one hand, oppo- on two arguments to maintain the statistical research and data. sure redemption laws and provide fect of Alabama’s current foreclo- research division to analyze the ef- The AAR commissioned ACRE’s ased analysis on real estate trends. estate industry and provides unbi- maintains data on the state’s real tate (ACRE), which collects and is the Alabama Center for Real Es- tory for real estate data in Alabama Debate Data-driven shockingly low. erties redeemed in Alabama is (2) the number of foreclosed prop- minority view in the country and statutory right of redemption is a clusions: (1) Alabama’s one-year ACRE analysis yielded two con- The most comprehension reposi- 5 The comparable to Alabama’s. have a right-of-redemption process North Carolina and South Carolina– Arkansas, Kentucky, West Virginia, boring states–Louisiana, Texas, “second ring” of Alabama’s neigh- Similarly, none of the states in the cultural real estate industries–then threaten the commercial and agri- could be written so that it did not properly threaded–i.e., if the law all. Thus, if the needle could be period would be microscopic, if at affected by a reduced redemption number of Alabama homeowners less than one year and that the tion period around the country was showed that the standard redemp- total of eight properties redeemed. 2013. In eachyear, there wasa pleted foreclosures in Alabama in Alabama in 2012and1,949com- 2,617 completed foreclosures in sale general redemption. ever, provide any meaningful post- states surrounding Alabama, how- and less than 365. redemption right of at least 90 days ally, there are five states year redemption period. have a meaningful post-sale one- cent. redemption rate of merely .4per- abama were redeemed, anannual 14,111 foreclosed properties in Al- ceding five years, only 55out of Mae showedthat during the pre- Foreclosure statistics from Fannie tion rate in the state is miniscule. available in Alabama, the redemp- demption option is, andhasbeen, as well as unique to the southeast. both a minority view in the country Alabama’s redemption statute is Alabama is one of only 11 states ACRE’s research conclusively Second, eventhough the re- First, ACRE research showed that 12 For instance, there were 9 None of the 7 8 10 Addition- that have a 11 Thus, 6 to of the sale. cised within 180 days from the date right of redemption may be exer- during which the sale occurred,” the emption was claimed in the tax year property on which a homestead ex- tate, if the property is “residential After the sale of a piece of real es- new 180-day redemption period. one-year redemption period or the property is subject to the standard tion of whether a particular piece of under Act 2015-79 is the determina- Properties Affected rights under Alabama law. mortgagor of his or her redemption types of properties to notify the the mortgagee foreclosing on these scription. Second, the law requires for properties meeting a certain de- the redemption period to six months law reduces the one-year length of changes to existing law. First, the makes two substantial, data-driven came effective January 1, 2016, of 86-12. The new law, which be- house of representatives by a vote senate by a vote of 34-0 and the ley on April 16 after passing the into law by Governor Robert Bent- ously Senate Bill 124) was signed (R-Moulton), Act 2015-79 (previ- mittee Vice Chair Ken Johnson tives by Financial Services Com- handled in the house of representa- Leader Greg Reed (R-Jasper), and Act 2015-79 reduced the redemption period. consider supporting legislation that maybe the legislature would finally The most important analysis Sponsored by Senate Majority 13 This reduction is only tory power of sale with respect to ior mortgage, pursuant to a statu- sale contained in a mortgage or jun- property was sold under a power of the date of the sale. Second, if the the date the notification is made or riod cannot begin until the latter of bama law. In fact, the 180-day pe- or her redemption rights under Ala- erty must be properly notified of his below, the mortgagor of the prop- are also met. First, as discussed applicable if two additional caveats standard one-year the determination particular piece Act 2015-79 is analysis under of property is subject to the new 180-day period or the of whether a redemption redemption important The most period. cation must have appeared once a the land was located, and the publi- published in all counties in which was to be given in a newspaper his or her property. The notification any upcoming foreclosure sale of be notified at least three times of 13 provided that a mortgagor must outweigh any compliance burdens. shorter redemption period should the mortgagee, the benefits of a place additional responsibilities on Though these notification provisions tion rights under Alabama law. multiple times of his or her redemp- affected homeowner to be notified clude a provision requiring an tors asked for the legislation to in- the foreclosed homeowner. lack of knowledge onthe part of demption rates were causedbya dered whether Alabama’s low re- Notices The Four homes havenot yet beensold. structed neighborhoods where the occupied bytenants or newly con- erties, suchasresidential homes applies to all other types of prop- one-year redemption period still by Act 2015-79. The historical interests, would remain unscathed mercial andagricultural real estate especially those representing com- ties, influential industry segments, ing the types of impacted proper- or after January 1, 2016. gage or judgment must be dated on a court, the mortgage, junior mort- by virtue of a judgment rendered by any mortgage or junior mortgage or Under the old law, Section 35-10- To address these concerns, legisla- Some in the legislature won- Importantly, bynarrowly tailor- www.alabar.org 33 T H E Alabama Lawyer 34 T H E Alabama Lawyer Though Act 2015-79 reduces the tion required bySection 35-10-13. notification bynewspaper publica- guage must also beincluded in the mailing. This same notice lan- using certified mail with proof of the property subject to foreclosure must bemailed to the address of the foreclosure sale. The notice least 30daysprior to the date of to bemailed to the mortgagor at following: a notice substantially stating the signed the mortgage must receive mortgagor. fourth notification is mailed to the rights under Alabama law. The also the mortgagor’s redemption the upcoming foreclosure sale but clude information about not only the newspaper publication must in- Section 35-10-13; in other words, with the notification requirement of those four times are concurrent times before the sale. Three of redemption rights at least four gagor must be notified of his or her which the sale occurred,” the mort- claimed in the tax year during which a homestead exemption was volves “residential property on Under Act 2015-79, if the sale in- week for three successive weeks. January 2016 Act 2015-79 requires this notice Specifically, the mortgagor who foreclosure process. grams asapart of the derstand these rights andpro- be consulted to help youun- process. An attorney should avoid or delay the foreclosure also exist that help persons cumstances. Programs may the property under certain cir- property the right to redeem sons whohaveaninterest in Alabama law gives some per- 14 foreclosure. within two years after the date of tice requirement must bebrought and anyactions related to the no- the transfer of title to the property, lidity of the foreclosure, including give notice, will not affect the va- fective notice, or the failure to properly given. Importantly, a de- begin until these four notices are the redemption period cannot days for these properties, because riod could technically exceed180 curred, the right-of-redemption pe- year during which the sale oc- exemption wasclaimed in the tax property onwhich ahomestead days for foreclosed residential one-year redemption period to 180 will yield speedier in the real estate greater certainty period means a investments in market, which properties and communities. The shorter redemption and greater of redemption, borrowers delay ment expenses in the unlikely event sure full recovery of their invest- property-owners. Currently, to en- benefits surrounding neighborhoods’ property more marketable, which the other hand, makes foreclosed designed to protect. harms the very homeowners it was longer redemption period actually the investor’s bid. In this vein, a shorter the vesting period, the higher is willing to pay. Conversely, the the title to vest, the less the investor other words, the longer it takes for tied to the redemption period. In at a foreclosure auction is directly amount an investor is willing to pay ful exit unworkable. Second, the snowball of fees that made a grace- table, they were confronted with a finally approached the bargaining point where, when the homeowners sations with their lenders to the would avoid uncomfortable conver- agreement. Frequently, homeowners renegotiate the terms of a lending that he or she had ample time to gave the homeowner a false sense First, the lengthy redemption period the homeowner in at least two ways. redemption period worked against markets. For example, the one-year fects on the lending and real estate redemption can produce negative ef- bama. Yet the mere possibility of erties were ever redeemed in Ala- clearly showed that very few prop- Period Redemption Reduced Benefits of a The shorter redemption period, on ACRE’s research and analysis Endnotes ABA andthe AAR. was well worth the efforts of the “bite of the elephant,” if youwill– This incremental modification–a lending andreal estate markets. major step forward for Alabama’s the passageof Act 2015-79 wasa bama homeowners. Simply put, years will harm few, if any, Ala- statute for the third time in 173 changing Alabama’s redemption legislators made certain that tion to the foreclosed homeowner, erties andprovides ample notifica- it affects asmall universe of prop- rowly tailoring the newlaw sothat borhoods across the state. Bynar- homeowners, investors andneigh- ties will haveapositive impact on half for certain residential proper- Conclusion and communities. greater investments in properties which will yield speedier and tainty in the real estate market, tion period means a greater cer- as 18 months. The shorter redemp- idle for as little as nine and as long properties, some of which have sat habilitation process on foreclosed delay in half and jump-start the re- period to six months will cut that redemption period. Reducing that after the expiration of the one-year most property improvements until .Inthe2014RegularLegislative then-Rep- Session, 4. 3. 2. See, generally, Ala.Code §6-5-248. 1. Cutting the redemption period in 2012 RegularLegislative Representative Session, That billnever madeitout of committee. Inthe which lowered theredemption periodto 60days. resentative Wes Long introduced House 158, Bill 791, 795(Ala. 1991). Garris v. Federal Land ofJackson,584So. Bank 2d Posey v. Pressley , 60Ala. 243,248(Ala. 1877). 15 L 11. Alabama’s closestneighbors–Mississippi, Ten- 10. 2 In 2010, there12. 4,660 foreclosures and 18 redemptions .Arizona, California, Maine, New Mexico and 8. 7. Alabama, Iowa, Alaska, Kansas, Min- Michigan, 6. 9. .The ACRE Research team for consisted thisproject 5. Wyoming. 48-10-16; and 6322-6324; 580d, 26(b), 729.010; Cal. Code Civ. Proc. Ariz. Rev. Stat. Ann Stat. 21-48A-1, 21-49-12,21-49-38,21-52-11andWis. 19-18; S.D. Codified Laws Code Mo. Rev. Stat. Stat.600.3280; Minn. Comp.60-2415; Mich. Laws A.C.A. and Tenn. Code Ann. CodeGa. Ann. Fla. Stat. right. See gage foreclosure withnomeaningfulredemption nessee, Georgia andFlorida–all provide for mort- 654.5, 654.20,654.26;Kan. Stat. Ann. 34.20.090, 34.20.100;Iowa Code Ala. Code Dakota and Wisconsin. Dakota, Montana, South nesota, Missouri, North www.acre.cba.ua.edu. More information aboutACRE isavailable at David Skinner andgraduate student Seve Gunter. of ACRE Executive Director Grayson Glaze, attorney it outofthesenate. payment.a missedmortgage That billnever made properties, butonlyiftheforeclosure resulted from six months for non-agricultural ornon-forestry 245,whichloweredBill theredemption periodto SenatorSession, Quinton Rossintroduced Senate it outofthesenate. Inthe2009RegularLegislative properties. and non-forestry That billnever made demption periodto 90days for non-agricultural introduced Senate 263,whichlowered Bill there- ular Legislative Senator Session, SladeBlackwell properties. Also inthe2011Reg- and non-forestry demption periodto 90days for non-agricultural troduced House 343,whichlowered Bill there- Legislative Representative Session, Steve Clouse in- made itoutofcommittee. Inthe2011Regular the redemption periodto 90days. That billnever Mike Hillintroduced House 673,whichlowered Bill and 16 redemptions (.4 percent). In 2012, there were (.4 percent). In 2011, there were 3,830 foreclosures §§ 51.002,51.003. 29-3-660, 29-3-680,29-3-740;andTex. Prop. Code 45-21.38, 45-21.38A;S.C.Code Ann. Stat.N.C. Gen. 426.220, 426.530;La. Code Civ. Pro. §§ 846.101,846.13,846.165. § 71-1-229;N.D. Cent. Code §18-49-106; Ky. Rev. Stat. Ann. §6-5-248; Alaska Stat. NM Stat. §§ 443.410,443.420,443.430;MT § 44-14-161;Miss. Code. §§ 45-21.20,45-21.27,45-21.36, Wyo. Stat. §729.020; §729.030 §§ 580b, . §§ 12-1282, 33-729, 33-814(G); §§ 45.031(8),45.0315,702.06; §§ 66-8-101to 103. §§ 39-5-17 to 39-5-21 and Me. Rev. Stat. Ann. §§ 580.04,580.23,582.30; §§ 1-18-103, 34-4-113. §§ 21-47-16,21-48-14, §§ 600.3240, §§ 09.35.250, §§ 32-19-03,32- §§ 628.3,628.26, §§ 2771-2772; §§ 15-39-610, §§ 426.005, §§ 60-2414, § 11-5-111; Tit. 14 §§ uies H sre o te tt bar’s state Character andFitness Committee. the on serves He Business. of SchoolAUM’s Graduateof graduate a he professor.also adjunct is an He where as serves Law, Thomas of the School Jones and Goode Business of College Jason S. Isbell Jeremy S. Walker sity’s Thomas Goode Jones School of of Law. University the Alabama fromand his J.D. B.S. from Faulkner his Univer-ceived re- He LLC. SlaughterHaskell with ticed 15. The long-serving general counsel oftheABAand The long-serving 15. 14. eligiblefor ahomestead exemption, Property gen- 13. roles inthiseffort. andHam AAR, HampBoles Wilson, played key Ala. Code §35-10-13. are blind. See, generally, Ala.Code §40-9-19. retired dueto total orwho orpermanent disability of Alabama whoare over 65years ofage, whoare owners, otherproperty includingresidentscertain acres. Homestead exemptions are alsoavailable to dwelling andthelandthereto, notexceeding 160 erally speaking, owner-occupied isasingle-family percent). there were 1,055 foreclosures and five redemptions (.4 demptions (.4 percent). From January to August 2014, In 2013, there were 1,949 foreclosures and eight re- 2,617 foreclosures and eight redemptions (.3 percent). Faulkner University’s Harris of graduate a is Isbell tion. Associa- the Bankers Alabama for affairs ernmental gov- and legal of president to joining the AAR, he prac- he AAR,the joining to Prior Realtors. of sociation directorforthe Alabama As- affairs government and sel vice president, general coun- Jason S. Isbell S. Jason Jeremy S. Walker www.alabar.org is the vice the is is senior 35 T H E Alabama Lawyer 36 T H E Alabama Lawyer January 2016 rules youhaveto Limited Liability Companies: as suggestions.” follow, but more The Birth of aNewClaim or aHole in the Law? think of laws as “I don’t like to George Carlin Minority Oppression in By Douglas B. Hargett and G. Bartley Loftin, III By Douglas B. G.Bartley and Hargett G in George Carlin’s words, mere suggestions to majority owners. less of laws designed to prevent it. Those laws are many times considered, oppress and squeeze out a minority owner. It happens every day, regard- clear-cut example of how a majority owner can use his or her control to majority owner, who is happy to buy the same at a deep discount. This is a check and has no way to sell his minority interest to anyone other than the cards and bank accounts. The minority owner has no control, needs a pay- sharing the company’s profits and cuts off the minority’s access to credit laterally run the company, terminates the minority’s employment, stops smaller decisions. Things snowball, and the majority owner begins to uni- until one day the owners disagree on a big decision, and then later, several president and chair of the board of directors. Everything is going great, nority owners. The majority owner assumes the roles of company sons, ownership of the company is split 60/40, creating majority and mi- by two business partners who decide to form a company. For different rea- with a brilliant idea, a cutting-edge product or a unique service developed the mantra of some business owners. Take a business that begins life is not only followed by free-spirited comedians, but it is also eorge Carlin’s clever one-liner about his approach to everyday www.alabar.org 37 T H E Alabama Lawyer 38 T H E Alabama Lawyer taken waslegally authorized.” ity cannot avoid that duty merely becausethe action least act fairly to the minority interests, andthe major- remain intact: “Majority shareholders oweaduty to at tenets of acorporate oppression claim set out in Burt claim hasevolved over the last 37years, but the basic tical matter, besold.” which paysnodividends and which cannot, asaprac- their interest in the business” and“holding stock operation of the business,” deprived of “income from minority shareholders being denied a“voice in the majority to abusetheir power. This scenario leads to disagreement, greed or something else) to trigger the the minority. The only thing neededis acatalyst ( the perfect environment for majority dominance over ple roles of owners, directors andofficers, creating occurs whenmajority shareholders assume the multi- Supreme Court in Burt v. Burt Boiler Works, Inc. can befound in the 1978decision of the Alabama And Squeeze-Out? What is Minority Oppression in closely-held corporation oppression cases. context, taking into consideration standing precedent the recognition of anoppression claim in the LLC cle discusses many of the arguments for andagainst rulings throughout the state at the trial level. This arti- which hasandwill continue to lead to inconsistent in different casesinvolving oppression in LLCs, trial courts are left considering competing arguments pression might havebeenraised is scarce. Alabama Caselaw addressing LLC member disputes where op- Supreme Court alluded to in DGB, LLC v. Hinds. pression in LLCs is non-existent, which the Alabama under Alabama law. Alabama caselaw discussing op- ity company (LLC) to pursue anoppression claim law, authorizing minority members of alimited liabil- precedent canbefound, neither statutory nor common these actions. In Alabama, however, noclear legal out against abusive majority shareholders to remedy can file aclaim for corporate oppression andsqueeze- share of the corporate gains.” cannot “deprive the minority shareholders of their just shareholders can usetheir control to “oppress” ( January 2016 The genesis of corporate oppression or squeeze-out Minority shareholders in closely-held corporations 5 As the terms suggest, majority 4 3 Oppression typically Majority shareholders i.e., 2 1 e.g., The scheme.’” and ceasesto fit neatly into the classical corporate the attributes of apartnership or sole proprietorship close corporation enterprise often ‘acquires many of corporations wasestablished in “recognition that a held corporations, oppression in closely-held trolled byafew individuals, unlike public or widely- sion has had its fair share of growing pains since abama’s judiciary system two centuries ago. Oppres- claims that have developed since the formation of Al- sion is still in its infancy when compared to other decades old in Alabama. By legal standards, oppres- tions than answers. Oppression is now almost four shareholder oppression claim, leading to more ques- More Questions than Answers Oppression’s Growing Pains: company’s gains havebeenproportionately shared. distributed to the minority to determine whether the the benefits received bythe majority to the benefits Oppression claims are often evaluated bycomparing because the claim arguably falls under the umbrella of whether a separate claim for oppression was necessary asserted by and against an individual shareholder and on behalf of the company or a direct claim that can be pression was a derivative claim that must be brought oppression was a contract or tort claim, whether op- Alabama. Some early questions concerned whether contrasting oppression with similar causes of action in dent from other jurisdictions, and comparing and ing and, in many instances, adopting oppression prece- develop a workable, consistent body of law by review- neys, legal scholars and Alabama courts attempting to Considerable time has been spent by practicing attor- sitions andeliminating other privileges andbenefits. bonuses andsalaries, excluding the minority from po- against the minority byrefusing to paydistributions, ers andmembers cansystematically discriminate in the company’s gains; however, majority sharehold- view themselves asbusiness partners whowill share an interest) minority shareholders. ( others from enjoying their rights) or “squeezeout” unfairly or unjustly useauthority or power to prevent i.e., actions taken in anattempt to eliminate or reduce Because closely-held companies are ownedor con- There has been much debate about the nature of a 7 Shareholders in closely-held corporations 6 Burt 9 8 . Supreme Court. In Hinds for minority oppression of LLC members frequently cite The Law and Need for Clarity DGB, LLC v. Hinds: law. established breach of fiduciary duty dismiss this claim. nature of the LLC entity, may lead courts to altogether to the minority, combined with the overtly contractual does duty owedbythe majority not contain an express ever, the statutory framework governing LLCs, which growing pains associated with this new claim. How- to resolve future cases and ease the be borrowed andtweaked bycourts isting corporate oppression law can bers is authorized in Alabama, ex- minority oppression of LLC mem- minority members. If aclaim for of LLCs to oppress andsqueezeout by majority or controlling members held corporations canalso beused by majority shareholders in closely- the conclusion that the tactics used ples of fairness andequity lead to Common senseandgeneral princi- nized by Alabama appellate courts. has not yet beenformally recog- ber of anLLC becausethis claim for oppression of aminority mem- that canbeusedto analyze aclaim direct legal authority in Alabama context. To the contrary, there is no support most positions taken. courts, and there is legal authority to sues before trial and appellate or she gives when arguing these is- will likely determine the answers he majority, company or shareholder) (plaintiff or defendant, minority or of the case an attorney represents answers to these questions. The side precedent, there are still conflicting Both proponents and opponents of a cause of action This is not the casein the LLC 10 , a June 30, 2010 decision of the Alabama Even with decades of legal Hinds , three individual investors A Hole in Common senseand minority members.minority general principles equity leadtoequity the members ofLLCsmembers corporations can the tactics used the tactics shareholders in conclusion that also be usedbyalso be to oppress and of fairnessand squeeze out closely-held by majority majority or majority controlling authority or argument.” eated general propositions not supported by sufficient address legal arguments for a party based on undelin- this court to do a party’s legal research or to make and the oppression claim, stating: “It is not the function of and limited its reasoning for affirming the dismissal of members. Rather, the court was silent on these issues, a duty to act fairly to the interests of minority LLC firmative or negative that majority LLC members owed members in Alabama. The court did not decide in the af- recognition of a claim for minority oppression of LLC ing. The court did not hold in favor of or against the In its analysis and holding, the court’s silence is deafen- gaping hole in the law when it comes to oppression in claim of ‘shareholder oppression.’” … or that 10-12-21(h) supports a showing that § 10-12-21(h) applies not cited any Alabama authority Court stated that the “investors have pression claim, the Alabama Supreme the trial court’s dismissal of the op- fusing this argument and affirming of good faith and fair dealing.’” Re- rights consistently with the obligation ating agreement and exercise any under this chapter or under the oper- company and its other members the duties to a member-managed ing that “‘[a] member shall discharge predecessor to § 10A-5-3.03(h), argu- members relied on § 10-12-21(h), the sion claim, DGB, LLC and its three opment. multi-million dollar real estate devel- harmed the minority’s interest in a members of Bon Harbor, LLC that tions allegedly taken by the majority oppression” related to oppressive action for what they called “shareholder three members asserted a cause of ac- other members. DGB, LLC and its of Bon Harbor, LLC was owned by percent majority ownership interest Bon Harbor, LLC. The controlling 60 percent minority member interest in LLC. DGB, LLC, in turn, owed a 40 owned a 100 percent interest in DGB, 13 This conclusion revealed the 11 In support of their oppres- www.alabar.org 12 39 T H E Alabama Lawyer 40 T H E Alabama Lawyer Pellets, LLC. different conclusion in In re Dixie trict of Alabama reached anentirely ruptcy Court for the Northern Dis- decided, the United States Bank- sume that an actionable claim existed. ments are made, but would not as- if additional or different legal argu- sion and squeeze-out in future cases pursue a cause of action for oppres- open for minority LLC members to Supreme Court in LLCs. In effect, the Alabama by minority LLC members without determining Dixie Pellets Supreme Court in Hinds, the bankruptcy court in on the minority. Moreover, unlike the Alabama alleged conduct of the majority andoppressive impact leged oppression, andplaced greater weight onthe sis onthe type of entity andowners involved in the al- Supreme Court, the bankruptcy court put less empha- taking this approach, in stark contrast to the Alabama tinctly individual anddirect causeof action.’” courts ‘recognize oppression andsqueeze-out asadis- ing closely-held corporation law, stating: “Alabama Burt pointing to aspecific fiduciary duty asthe court did in cause of action for oppression in the LLC context or action. Without addressing whether there is avalid asserted bythe individual LLC members asadirect bers’ claim wasderivative in nature and could not be the majority member argued that the minority mem- interest. In its motion to dismiss the oppression claim, LLC that required repayment at anexcessive rate of additional capital to beinfused into Dixie Pellets, tempted to squeezethem out of the LLC byallowing alleged that the majority member oppressed andat- ceeding. The minority members of Dixie Pellets, LLC bankruptcy court andpursued in anadversary pro- resulting in the state court lawsuit being removed to untary petition for relief with the bankruptcy court, Dixie Pellets, LLC later filed avol- LLC, in Alabama state circuit court. controlling member, Harbert DP, filed alawsuit against the majority, members of Dixie Pellets, LLC January 2016 Three weeksbefore Hinds , the bankruptcy court simply cited to longstand- 14 considered the oppression claim asserted There, minority Hinds left the door was “alabama courts oppression and squeeze-out as squeeze-out direct cause of cause direct individual and 15 a distinctly a distinctly ‘recognize By action.’” of the Alabama Code. these entities are controlled bythe applicable sections statute, meaning that the formation andgovernance of And Limit of Fiduciary Duties Silence of the LLC Statutes ity or controlling shareholders. awarded to prevent or remedy “oppression” bymajor- damages, aninjunction andother relief may be “fiduciary obligations” to minority shareholders, and ship of amajority, or other controlling, interest” have ers exercising control …whether byreason of owner- Code of the Alabama Business Corporation Law, Alabama tion for minority oppression exist in LLCs? facts andthe same legal question–does acauseof ac- though the casespresent virtually indistinguishable times failing to another client’s detriment, even argue their casesto the benefit of oneclient andother guments made oneachside, leaving attorneys to trial court judges must continue to sort through the ar- minority shareholders from oppression andimposing statutory basis created by the legislature protecting oppress minority shareholders. There is an express jority shareholders’ feet canbeheld to the fire if they statute conveysaclear message: in corporations, ma- LLCs andclosely-held corporations are creatures of §§ 10A-2-1.01, et seq.,states that: “sharehold- member. With the sion claim is alleged by an LLC neys face whenaminority oppres- court judges andpracticing attor- the recurring conflict that state trial reached bythe two courts illustrate complete opposite outcomes dent for the other to follow, but the neither casesetting binding prece- cided in different jurisdictions with pellate courts in the LLC context. mally authorized by Alabama ap- whether suchaclaim hadbeenfor- Alabama legislature. Until clarified, abama appellate courts or bythe tinue until the issue is settled by Al- unaddressed, uncertainty will con- on oppression in LLCs remaining Hinds 16 Alabama Code and Dixie Pellets 17 The language in this Hinds § 10A-2-8.31 conclusion were de- this subsection of the statute. Moreover, the Alabama oppression claim would seem to conflict directly with ber’s conduct furthers the member’s own interest.” An under the operating agreement merely because the mem- not violate a duty or obligation under this chapter or that a “member of a member-managed company does is not used in any form. In fact, § 10A-5-3.03(i) states minority member before acting, and the word “oppress” member to consider the effect of his or her actions on a None of the LLC statutes impose a duty on a majority nerships.” bined with the favorable tax treatment afforded to part- “the corporate characteristic of limited liability coming the LLC entity in Alabama to offer business owners Alabama LLC Act also went into effect in 1994, creat- porations by statute is important because the initial tivation for recognizing oppression in closely-held cor- practical purposes, a partnership. The legislature’s mo- shareholders in closely-held corporations was, for all minority shareholders because the relationship between lature to create a statutory fiduciary duty in favor of created by Alabama courts prior to 1994) led the legis- minority shareholder oppression asfollows: 2B-8.31 stated the reason for statutorily adopting tion established in Burt and codified the shareholder oppression causeof ac- 2B-8.31, the predecessor to §10A-2-8.31, in 1994, of this statute first appeared in Alabama Code ers to treat minority shareholders fairly. The language a fiduciary duty onmajority or controlling sharehold- members the duty of loyalty and duty of care ….” vides that “[a] member owes to the company or its other (ALLCL), Alabama Code §§ 10A-5-1.01 has not been included in subsequent versions. inserted into the Alabama LLC Act in 1994, and one Thus, the “recent line of cases” ( The current Alabama Limited Liability Company Law duty closer to that of partners is suggested. held corporations, a standard breach of fiduciary activities by the majority, where, in small, closely- tection of minority holders against “freeze-out” tion. There is a recent line of cases involving pro- as directors, officers, and employees of a corpora- duciary duties may be imposed upon them, as well jority or controlling shareholders, to the extent fi- It is noteworthy that the provision applies to ma- 19 However, no anti-oppression statute was . The secondcomment to §10- i.e. , common law , et seq. 18 § 10- , pro- 20 small businesses asfollows: dilemma faced byminority owners of LLCs andother Shareholders and LLC Members, sums upthe O’Neal and Thompson’s Oppression of Minority proprietorship. The leading treatise onoppression, LLC, closely-held corporation, partnership or sole company, irrespective of whether the entity is an not lessen the likelihood of oppression in asmall tible to oppression. The chosenlegal structure does just like closely-held corporations, are equally suscep- nority LLC members, make nomistake that LLCs, ity or controlling LLC members from oppressing mi- Closely-Held Businesses Oppression in LLCs and Other Common “Seeds” of new ALLCL of 2014. the ALLCL, and will find no additional assistance in the LLCs, therefore, find little help in the plain language of guing for a cause of action for minority oppression in minority oppression in the LLC context. Proponents ar- 10A-5-3.03(h) did not, standing along, create a claim for “good faith and fair dealing” set out in Supreme Court previously held in While there is not astatutory duty forbidding major- statutes…. It is not unusual for courts to simply corporate precedents in interpreting LLC [C]ourts regularly refer to both partnership and structure that is usedto conduct the business.’ itself, rather than from characteristics of the legal business owners andthe small business setting factors stem primarily from the traits of small to produce the same outcome in the LLC. Those for protection in the close corporation are likely that contribute to afailure to effectively contract expectations of the parties. ‘In short, the factors tralized power that did not match the ties whenthe corporate norms led to usesof cen- down the line after afalling out among the par- sons andencountered unexpected problems chose the corporation for liability andtax rea- close corporations where participants similarly LLCs are nowset upto follow the experience of 21 * Hinds Alabama Code that the duty of www.alabar.org § 41 T H E Alabama Lawyer 42 T H E Alabama Lawyer minority shareholders–in the following manner: ated fiduciary duty owed by majority shareholders to of fiduciary duty–then a common law, judicially-created. The court in Supreme Court at the time the cause of action was cre- LLCs, one must look to the reasoning of the Alabama law in Alabama and determine if it should apply to subsequent oppression cases. To understand oppression foundation and jumping-off point for the analysis of claim for shareholder oppression, and has served as the Minority Members Duty OwedbyMajority to “Specific Type” of Fiduciary country. reality accepted bydifferent jurisdictions around the ity andminority classes is susceptible to oppression–a than oneownership group that is divided into major- sion in the LLC context. son for acknowledging acauseof action for oppres- January 2016 Burt Every small or closely-held business having more or officers whom they control) to observe accepted their capacity as shareholders or through directors the courts will require them (whether they act in fiduciary duties to the minority shareholders … and shareholders, in some circumstances at least, owe substantially change the picture…. [C]ontrolling fact that the enterprise is incorporated should not one similar to the relationship among partners. The their relationship should be considered a fiduciary gether (as they usually do in a close corporation), ‘Where several owners carry on an enterprise to- corporations recur in LLCs. tent, oppression discussions common to close to square with parties’ expectations. To that ex- exclusive majority control that may bedifficult tory norms or contractual settings permitting eted relationship between the parties andstatu- and noexit via the statute, anintimate multifac- treatise–a lack of market for ownership interests ‘seeds’ of oppression discussed elsewhere in this ment of the difference…. LLCs havethe same the LLC asacorporation without acknowledg- apply corporate law precedent andactually label was the seminal case in Alabama establishing a 23 This provides astrong, common-sense rea- Burt defined oppression as a breach 22 cer or director. that of astandard breach of fiduciary duty byanoffi- remedy for “amore specific type of unfairness” than ing that the oppression claim wasmeant to bea pounded uponthe fiduciary duty created in Burt it may haveprovided the Alabama Supreme Court minority oppression claim been asserted in Harbison, operating agreement from the Alabama Code.Hada that the court deemed implicitly incorporated into the ties of loyalty, care andgoodfaith andfair dealing stated in the LLC’s operating agreement, and the du- been asserted but, for whatever reason, was not. cases where a claim for minority oppression could have duty against majority or controlling LLC members in allowed a direct cause of action for breach of fiduciary ary duty. Alabama courts have, on several occasions, pression is in the same legal family as breach of fiduci- in the LLC context, a cause of action for minority op- whether a minority oppression claim should be accepted tions, partnerships and limited partnerships. comparable to the fiduciary duties owed in corpora- owed fiduciary duties to the non-controlling member conclusion that the controlling member of an LLC as general closely-held corporation law, to reach the tional shareholder oppression cases in Alabama, as well borrowed from pellate courts in minority oppression in the LLC context, Alabama ap- none of these cases went so far as to adopt a claim for sulting in direct injury to aminority owner. shareholder to shareholder in aclose corporation,” re- unique, specific “fiduciary duty running directly from oppression. This is becauseoppression results from a deemed insufficient to address the harms causedby or in some circumstances asadirect claim, was be brought onbehalf of the corporation derivatively violating the duties of loyalty andcare, which could duciary duty claim against officers or directors for In Brooks v. Hill The court in Harbison It is important to keep in mind that, when analyzing and directors.’” as much so as the corporation itself or its officers occupies a fiduciary relation toward the minority, ity has the right to control; but when it does so, it ing rights of minority shareholders.’ …. The major- standards of business ethics in transactions affect- 25 Brooks Harbison v. Strickland Thus, arun-of-the-mill breach of fi- 24 , the Alabama Supreme Court ex- and stuck to the fiduciary duties Fulton v. Callahan and 28 Polk v. Polk 26 , founda- 27 While , stat- by one person over another.” ble” and “dominion may be exercised terms,” “an unfair advantage is possi- “the parties do not deal on equal ence or superiority over the other,” the controlling member has “influ- other’s interests,” particularly where ber] will act in good faith for the confidence that [a controlling mem- members “as reasonably to inspire lationship” exists between LLC special “fiduciary and confidential re- fiduciary duty claim, finding that a trial court’s dismissal of the breach of legal arguments, but it reversed the sion claim for lack of supporting Court dismissed the minority oppres- this issue in the LLC context. with aprime opportunity to resolve tion allowing a direct action by a minority shareholder officers because Utah’s closely-held corporation excep- lowed to pursue a direct action against individual ber of an LLC argued that the minority should not be al- case, bers against majority or controlling members. In a Utah clusions, allowing direct claims by minority LLC mem- cases beginning with duty described in the long line of shareholder oppression cal to the “specific type” of fiduciary members in between majority and minority LLC ciary and confidential relationship” language used to explain the “fidu- clude new common law duties. The members described in tended the fiduciary duties of LLC good faith and fair dealing, and ex- the implicit duties of loyalty, care and duties in the operating agreement and yond simply citing to the fiduciary owners. The court in tween majority and minority business oppression and the relationship beused by Alabama courts to describe language is remarkably similar to that In Courts in other jurisdictions have reached similar con- Hinds Banyan Inv. Co., LLC v. Evans , the Alabama Supreme Hinds is virtually identi- Hinds Burt Harbison . went be- 29 This to in- , the majority mem- ‘seeds’ of oppression and statutory norms discussed elsewhere between the parties ownership interests statute, an intimate control that may be LLCs have the same settings permitting and no exit via the exclusive majority difficult to square lack of market for in this treatise or contractual expectations. multifaceted with parties’ relationship sion in LLCs. Regardless of the ultimate decision by draw a distinction and avoid adopting minority oppres- ent entities, will make it difficult for Alabama courts to tionship of minority and majority owners across differ- overlap of language used by courts to describe the rela- of action for oppression, combined with the significant other closely-held businesses that already allow a cause members. The close legal relation between LLCs and against a new claim to benefit oppressed, minority LLC future LLC cases. Good arguments can be made for and –a of action for minority oppression in appellate courts to recognize a cause Hinds ary duty against officers or directors. and fair dealing and breach of fiduci- ties of loyalty, care and good faith ment, statutory violations of the du- for breach of the operating agree- member is limited to asserting claims majority member. An oppressed LLC pression against a controlling or sue a cause of action for minority op- minority LLC members cannot pur- Members For Minority LLC The Road Ahead limit the exception to corporations.” tions and LLCs makes it illogical to the “similarities between corpora- closely-held corporations, because company, just like shareholders of “distinct” from that suffered by the a direct action when the injury is member should be allowed to pursue belongs to the corporation, an LLC duty claim is derivative in nature and while a standard breach of fiduciary member’s argument, noting that of Appeals shot down the majority not apply to LLCs. holder oppression in Alabama) did shareholder (equivalent to share- against a majority or controlling As Alabama law currently stands, left the door open for Alabama 30 The Utah Court www.alabar.org 31 43 T H E Alabama Lawyer 44 T H E Alabama Lawyer Endnotes text differently and have no clear precedent to follow. Alabama who view minority oppression in the LLC con- judgment is granted or denied by trial courts throughout every time a motion to dismiss or motion for summary ity LLC members alike are being decided inconsistently obvious. The rights and interests of minority and major- Alabama appellate courts, the need for clarification is 1 The ALLCL of 2014, Ala. Code §§ 21. 10A-5A-1.01 Ala. Code §10A-5-3.03(e). 20. 19. Ala. Code §10-2B-8.31,cmt., Galbreath 2 (citing oppression pre-1994 Burt cases: 18. Ala. Code §10A-2-8.31. 17. 16. 15. 14. 13. 12. 11. 10. 9. 8. 7. OPPRESSION&SQUEEZE-OUT, Black’s (10thed. 2014). Law Dictionary 6. 4. 3. 2. 5. 1. January 2016 made that it was the legislative intent to preclude minority oppression claims in [LLC].” Because there is not an anti-oppression provision, a strong argument can be tures of the new law is that “[t]he Act focuses on the contractual nature of the and care. The ALLCL of 2014 states in the comments that one of the significant fea- dutiesofLLCsion provision, andlimitsthefiduciary membersto thoseofloyalty 1, 2017 (for LLCs formed under the current ALLCL), does not contain an anti-oppres- ALLCL effective January 1, 2015 (for LLCs formed on or after this date), and January ofLLCs(1998) (discussing history inAlabama). CompaniesLimited Liability inthePost Check-The-Box Era, 49Ala. L.Rev. 909,910 See Brownand Exparte ). “ALLCL”); Ala. Code §§10A-2-1.01,etseq. See PelletsDixie , at *4-5. (unreported) (citing In re Dixie Pellets, LLC Id. Id. at 233. Hinds, 55So. 3dat 221-22. Shareholders:of Minority Contract, Not Tort , 54Ala. Law 128(1993). New Tort ofOppression, 53Ala. Law DeBow, E. 108(1992);Michael “Oppression” generallySee BrownEx parte , 562So. 2dat 494. (2008) (describing techniques). oppression andsqueeze-out 1978, but pression,” “squeeze out” and “freeze-out” can be found in Alabama caselaw prior to Burt v. Burt Boiler Works, Inc. DGB, LLC v. Hinds , 55So. 3d218,232-33(Ala. 2010). See, e.g., Brown, Exparte 562So. 2d485,493-94(Ala. 1990);seealsoO’N ofAlabama,709So.Bank 2d458,467(Ala. 1997). Brooks, 717So. 2dat 764-66;Galbreath, 433So. v. 2dat 457;Stallworth AmSouth Galbreath v. Scott, 433So. 2d454,457(Ala.). 1983)(quoting Burt incorporateproportionally gains”). holders have a “right to fairnessby themajority” and expectation to“basic share Id. Id. T HOMPSON (citing 717So. 2d759,765(Ala. share- 1998)(minority at 332;seealsoBrooks v., Hill at 331. Laurel Wheeling Farrar Pace andSusan from Hamill, Dissociation Alabama Ala. Code §§10A-5-1.01,etseq. ’ S Jimmy Day Plumbing & Heating, Inc. v. Smith Burt O PESO OF PPRESSION Andrew P. Campbell, Shareholder andthe Minority Litigating Rights was the first case to formally establish a separate cause of action. , No. 09-05411, 2010 WL 2367326 (Bankr. N.D. Ala. June 9, 2010) Davis v. Dorsey M INORITY , 360 So. 2d 327 (Ala. 1978). Earlier references to “op- S , 495 F. Supp. 2d 1162, 1168 (M.D. Ala. 2007)). AEODR AND HAREHOLDERS (“Alabama Company Limited Liability Law” or (“Alabama Corporation Business Law”). , et seq. LLC M , which repeals the current , 964 So. 2d 1, 9 (Ala. 2007)). EMBERS §§ 3:02,3:7&3:8 A AND EAL L G. Bartley Loftin, III Douglas B.Hargett 2 O’N 22. 3 2C 23. 31. 30. 29. 28. Harbison See v., 900So. Strickland 2d385,386(Ala. 2004)(reversing summary 27. Oppression Moll, Douglas Minority Company: andtheLimited Liability Learning (Or 26. 25. 24. gained for by the parties in the contractual formation documents. the LLC context and limit duties of members to those set out in the statute or bar- Banyan, 292P.3d at 703. jority’s abuseofcontrol). 19 (Md. App. LLC 2011)(minority membersmay bringindividualclaimsfor ma- Wasserman &Janice Wasserman Goldstein Family, LLC v. Kay, 14A.3d1193,1218- Banyan Inv. Co., LLC v. Evans, 292P.3d 698(Utah App. 2012);seealso George ence over another). faith andfairdealing,” isinpositionto influ- exert whenonepartner particularly describing “confidential relationship” of andduty amongbusinesspartners “good 89-90 (N.D.Burt Ala. 1968)(pre- (Ala.1985)); v. seealsoBelcher Birmingham Trust, 348F. Bank National Supp. 61, Hinds, 55So. 3dat 233-34(citing ofRed v. Bay Bank King, Brooks ofHarbison (citing portions Fulton v. Callahan, 621So. 2d1235,1246-47(Ala. 1993));Polk, 70So. 3dat 371 Harbison, 900So. 2dat 389(citing Brooks, 717So. 2d759,764(Ala. 1998)and alleged). members ofLLC, was thoughneitheroppression duty norbreach offiduciary 289-91 (Ala. 2003)(reversing to allow claimsagainstcontrolling, direct majority of LLC); seealsoLove v. Fleetway Freight Air Service, LLC &Delivery , 875So. 2d285, againstcontrolling, duty for breach ofaction offiduciary cause member majority (Ala. Civ. App. 2010)(citing closely-held corporation individual law to support claimonremand); duty Polkbreach v. offiduciary Polk, 70So. 3d363,370-72 member,minority andallowing majority, non-controlling memberto maintain judgment in favor ofLLC’s controlling member-manager, was whoatypically the Not) From Close Corporation, 40 History Wake Forest L.Rev. 883,892-95(2005). Brooks, 717So. 2dat 765. ing” intheALLCL. ethics” referred to inBurt (1919)). Itwould to belogical argue that the “accepted standards ofbusiness , 360So.Burt 2dat 332(citing Pacific Southern Co. v., 250U.S. 483,487-88 Bogert states oppression treatment andminority claims). duty ofbreach offiduciary LOSE EAL t§§6:2and6:3. at and Fulton). C R AND ORP office. Arant Boult Cummings LLP in the Huntsville G. Bartley Loftin, III is apartner with Bradley Hargett PC in Tuscumbia. Douglas B. Hargett is a partner with Hall Tanner LLC S : L WAND AW is tantamount of to theduty “good faithandfairdeal- that refer analysisin duty to breach offiduciary P RACTICE federal court decisioncited byfederal Brooks court § 9:18(Rev. ofall50 3ded.) (includingchart 482 So. 2d274 and Fulton (Photograph by FOUTS COMMERCIAL PHOTOGRAPHY, Montgomery, [email protected]) JULY 2015 BAR EXAM STATISTICS OF INTEREST For detailed bar exam statistics, visit https://admissions.alabar.org/exam-statistics. all admission requirements asprescribed by the Rules Governing Admission to the Alabama State Bar the period May 5,2015through November 1,2015. To becertified for admission, a candidate must satisfy *Statistics of those certified to the Supreme Court of Alabama for admission to the Alabama State Bar for Certification statistics* ExamPassageBar by school diso ihu xmnto Rcpoiy ...... 12 ...... Admission without Examination (Reciprocity) 5 ...... 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Bingham Dailey Darius Antoine Crayton Jaley Ayn Cranford Aubrey Bernard Coleman, II Elliott Howard Clark Jordan Elizabeth Cherry Tyler Carr Cashbaugh Nathaniel Madison Cartmell, IV Nashad Omar Carrington Robert Clayton Cain Rachel Smithson Byrd Caleb Nathanial Byrd Amanda Diane Butterworth Jacqueline Victoria Butler Susan Ellen Burgin Nicholas Daniel Bulso Dillon Kane Bullard Matthew Steven Hale Carson Scott Hale James Nathaniel Guin Caitlin Hardee Graham Angela Hamner Gooch Robert Adam Gilmore Alyse Nicole Gillman Matthew Gregory Garmon John Joseph Gamble James Tolbert Gafford Madison Michelle Fuller Luke Van Deusen Fredericks Dakota John Fox Bradley Sims Foster Roncheros Douglas Fortune Malika Sanders Fortier David Andrew Folkner Mark David Foley, Jr. Murray Scott Flint Elizabeth Jones Flachsbart Alexander David Flachsbart Hugh Michael Farnsworth Madison Lindsay Fair Michael Edward Evans Adam Wesley Evans Durvatheheir V.L. Esquire Brooks Hatton Emanuel Nicholas Paul Edwards Jami Nicole Davis Edwards Blake Clifton Edwards Thomas Paul Edington Joey Herman Eddy Paige Allison Duncan Courtney Brown Dubberly Virginia Blair Druhan Bullock Christopher Baxter Driver Kendra Nicole Key Angela Evette Kennedy Jessica Ribis Keir Sara Mae Judah Sarah Elizabeth Jones Nicole Brown Jones Martin Christopher Jones Allen Gregory Jolley Sheena Marie Johnson Robert Whitaker Johnson, Jr. Matthew Taylor Johnson Clay Caldwell Johnson Justin Michael Moore Jenkins Shanitra Janae Jackson Julie Jackson Cody Blake Isbell Chase Russell Hutcheson Mark Anthony Husted Lauren Statler Hunt Lauren Ashleigh Hunnicutt Andrew Craig Hudson Ana Victoria Hubickey Tiffany Ann Holford Lauren Nicole Hodskins Kimberly Rene Hobbs Kenneth Bryant Hitson Phylicia Helena Hill James Jackson Hill, IV Andrew Michael Hickman Jason Robert Herbert Joshua Brenton Hembree Timothy Chase Harris Arthur Bain Gleason Hanning Bryan Joseph Hamlin Donna Brooke Hallmark Aisha Mishal Hall Andrew Randle McKinney Erika Rucker McKay Katherine Elizabeth McGuire Paul William McDaniel Randi Leigh McCoy Forrest Talma McConnell, IV Amanda Leigh McCleney Jones Terri Alexandria Mayweather- Christopher Daniel Mauck Taylor Grier Martin Jennifer Brooke Marshall Aaron Nicholas Maples Logan David Lee Manthey Meredith Kay Maitrejean Steven Michael Madison Natalie Ann Lyons Edward Webb Lyons Travis Edward Lynch Ayla Gabrielle Luers Aimee Roebke Lucas Regan Coleman Loper Caitlin Jordan Looney Amy Dumas Logan Audrey Megan Liston Andrew Stephen Lindsey Jon Davidson Levin Nicholas Dean Leslie Britley Cole Leonard William Harrison Lee Kendall Ann Lee Barton Thomas Lee Tanika LaRosa Lakes Kathryn Marinda Kyatt Sandra Katherine Koslin Aigner Shanea Kolom Amanda Graham Kisor Chandler Osborn Kirby Laura Elise King Jessica Anna Piltch Samuel Carlton Pierce Teresa Darwin Phillips Meredith Riley Phillips Barbara Chelsea Phillips Taylor Alan Pharr Matthew Whiddon Peterson Jasmine Till Peterson Stephen Alexander Perdue Emily Grace Peake Ellie LaShea Parker Ruby Kelly Panter Chelsey Coon Palmer Brian Leonard Padgett Tiffany Shaye Owens Lisa Woodard Overton Sarah Sutton Osborne Katie Cameron OMailia Vincent Edward Odom Andrew Lee Odom Henry Francis O’Connor, III Jonathan Nomamiukor, II Matthew Wayne Nicholson Chuantae Alexandria Nichols Justin Raul Murray Rick Aidan Mula Anthony Lane Morrison Michael Franklin Morris Mary Lena Morgan Joshua Tyler Morgan Carol Thetford Montgomery Misha Leigh Mitchell Katherine Victoria Mitchell Justin Alexander Mitchell Patrick Nunnelley Mims Lindsay Catherine Mims Lauren Elizabeth Miles Stuart Hamilton Memory Nicholas Ray Medley Jordan Elizabeth Stephens James Alexander Steadman Lauren Glass Spradling Jeffrey Williams Speegle Jillian Alexandra Sparks John Robert Spade Michael Calup Snider Thomas Scott Smith, III Leonard James Smith Brandon Nicholas Smith Alexandria West Smith Matthew Robert Slaughter Caroline Collins Sims Parker Bryan Simpson Sandy Susie Shannon Robert Jackson Sewell John Christian Saylor Evan Michael Sartin Lauren Nicole Sanchez Tereza Carolina Castro Sampaio Renee Elizabeth Salley Patrick Wilson Saint Sarah Elizabeth Rutledge Ryan Sikes Rummage Queena Adriana Ruffin Sara Margaret Rossmanith Amanda Brooke Robinson Jon David Roberts, Jr. Chrissy LaKay Riddle Rachele Alexandra Reis Katherine Elizabeth Reeves Nannie Natisha Reed Tiffany Nicole Ray Jonathan Edward Ray Shelley Elizabeth Rawlings Christopher Allen Ramanauskas Allyn Catherine Powell Thomas Charlton Pope Laura Alyn Pizzitola Marshall Alan Yates Matthew Dean Woodham Rebecca Marie Winters Lydia Michelle Wimberly Kaila Bryant Wilson Joshua Alan Willis Kevin David Wilkerson Johnathan Norregaard Wilhelm Austin Brock Whitten Andrew David Westcott Katherine Edwards West Bradley James Watts Joel Philip Watson Lance William Waters Emily Slay Walters Dylan Grant Wallace Lauren Gessner Walker Ashley Schaid Waldrop Leigh Catherine Veillette Roger Wayne Varner, Jr. Sean Christopher Vanden Heuvel Kathryn Alyda Van Tol Joseph Anthony Tutone, Jr. Lacy Michele Triplett David Thornton Trice, Jr. Whitney E. Tillman Rushton Glenn Thrift Shelby Adams Thorpe Allie Benae Thompson Gretchen Denise Thomas Renee Smith Thagard Spenser Hope Templeton Leah Catherine Taylor Dominik Jermaine Taylor Hunter James Tate Ruth Mahoney Swift Jennifer Lev Susman Mallory Storey Ryan Lassiter Stinson www.alabar.org L 47 T H E Alabama Lawyer 48 T H E Alabama Lawyer January 2016 Y L I M A F E H T N I S R E Y W A L Elizabeth Flachsbart Stephen A. Perdue Alexandria Smith Banks T. Smith, Sr. (1985) D. Wayne Perdue (1976) Admittee andfather Admittee andfather Husband andwife co-admittees, Alexander Flachsbart mother-in-law/mother (2015) and (2015) and (2015), Elizabeth Jones (1982) (2015), Lena Morgan John Gamble Michael Gamble (1987) Charles Morgan (1985) Admittee andfather Admittee andfather (2015) and (2015) and Kendall Lee Admittee, father anduncle Mark Lee (1977) (2015), David Lee (1986) and Madison Michelle Fuller and JudgeBenFuller (1990) Katherine West Admittee andfather Admittee andfather Hal West (1987) (2015) and (2015) and Kenneth Allen Hitson, Jr. (1989) Y L I M A F E H T N I S R E Y W A L Thomas DewayneBonds(2003) Kenneth Bryant Hitson Aisha Mishal Hall Admittee andfather Admittee andfather Wife andhusbandco-admittees, father/father-in-law, father-in-law/father, mother-in-law/mother Lindsay C.Mims (2015) and (2015) Judge James C.Guin (1980) andSandra Guin (1985) (2015), James N.Guin (2015), L. Daniel Mims (1985), William H. Broome, Jr. and William H.Broome (1977) Faye DossSuggs Admittee andgrandfather Chriss H.Doss (1968) Admittee andfather (2015) and (2015) Erika Rucker McKay Chandler Osborn Kirby and Jeffrey C.Kirby (1981) Christopher McKay(2012) Admittee andhusband Admittee andfather www.alabar.org (2015) and (2015) 49 T H E Alabama Lawyer 50 T H E Alabama Lawyer and Thomas Scott Smith, Jr. (1994) January 2016 Y L I M A F E H T N I S R E Y W A L Allen Gregory Jolley Thomas Scott Smith, III Judge Tim Jolley (1981) Admittee andfather Admittee andfather Leah Catherine Taylor (2015) and (2015) Tracy Taylor Sproule (1996) andChris Reader (2014) Admittee, father, mother, sister andfiancé Stephen Bulgarella (2015), Ted Taylor (1966), Leah Oldacre Taylor (1983), Austin Whitten Joseph Bulgarella (1989) Randy Whitten (1979) Admittee andfather Admittee andfather (2015) and (2015) and and Wilson Daniel Miles, III (1990) Lauren Elizabeth Miles Joshua Willis Admittee anddaughter Admittee andfather Jeff Willis (1982) (2015) and (2015) Y L I M A F E H T N I S R E Y W A L Judge A. Ted Bozeman (1967) andJudge Terri Bozeman Lovell (1996) Chelsea Phillips David Andrew Bozeman Admittee andhusband Tae Phillips (2009) Roger W. Varner, Jr. Roger W. Varner, Sr. (1994) Admittee andfather Admittee, father, grandfather andaunt (2015) and (2015), Russell F. Bozeman (2000), (2015) and Carol Thetford Montgomery Robin B. Thetford (1981) andJosephD. Thetford, Jr. (2013) Admittee, father, mother andbrother Forrest Talma McConnell, IV Forrest Talma McConnell, III (1983) (2015), JosephD. Thetford, Sr. (1981), Admittee andfather Andrew McKinney Randy McKinney (1986) Admittee andfather (2015) and (2015) and www.alabar.org 51 T H E Alabama Lawyer 52 T H E Alabama Lawyer Sixteenth Street Baptist Church. victions for the 1963 bombing of Birmingham’s Frank Cherry on appeal from his murder con- office, Starrett successfully prosecuted Bobby Attorney General. Among other cases for the gomery before appointment to the Office of the gaged in civil and criminal practice in Mont- on the Alabama Supreme Court, and was en- tice Kenneth Ingram and Justice Mark Kennedy of Law. Starrett served as staff attorney to Jus- graduate of the University of Alabama School pus in all state and federal courts. He is a the state in criminal appeals and habeas cor- eral for the State of Alabama and represents Marc A. Starrett and commercial litigation. resents consumers and businesses in consumer in class actions and complex litigation. He rep- sor at the law school, where he taught courses From 2000-09, Green served as adjunct profes- Court for the Northern District of Alabama. Hon. Robert B. Propst, United States District School of Law and a former law clerk to the laude Green LLP in Tuscaloosa. He is a Wilson F. Green January 2016 graduate of the University of Alabama Marc A. Starrett Wilson F. Green is a partner in Fleenor & is an assistant attorney gen- summa cum authority to conduct businessfor to conduct resident.authority to contract for himself orto holdoutmotherashisrepresentative, andmotherlacked nied arbitration. affirmed,The reasoning supreme that court resident lackedcapacity tated but over 21,andPRhadnoPOA orguardianship power. de- The circuit court to binddecedentclaiming lackoflegalauthority becausedecedent was incapaci- guardianship power. Operator moved to compel arbitration, whichPRopposed, mother as “Resident’s Representative,” butmother/PRdidnothave aPOA or documents asdecedent’s Party.”“Responsible Arbitration agreement was signed by operator.facility hisadmissiondocuments, In PR(motherofdecedent) executed the PR ofprofoundly disableddecedent intellectually against filedwrongful death action Diversicare Leasing Corp. v., no. Hubbard 1131027(ala. sept. 30,2015) arbitration; Capacity (nursingHome Contracts) perintendent because superintendent cannot make termination decisions unilaterally. Section 14 immunity barred money damage claims by non-tenured teacher against su- Hampton,no.Ex parte 1140341(ala. sept. 30,2015) Public Employment employment action. jobreview,because unsatisfactory withouttangible consequences, was notadverse preclusive effect. Trial court’s determination no-retaliation waserroneous, notclearly of evidence, whichcanbeweighed againstotherevidence, andare notentitled to In Title discriminationandADAVII retaliatory case, EEOCfindingsare merely anitem Johnson v. ofMobile,no. City 1140433(ala. sept. 30,2015) Public Employment; Employment Law and thusthecomplaint for damagesandreturn ofthelogbookwas againsttheState. becauseplaintiff admitted 14immunity that thelogbookbelongedto USA, section professor were Alabama at againstco-employees) University ofSouth barred by claims(by ex- Other theidentitiesercise oftheparties. duediligence inascertaining parties’complaint thefictitious didnotdescribe and(3)plaintiff didnotex- conduct identities ofthedefendants when shefiledtheoriginal complaint, (2)theoriginal entities because(1)plaintiff were failedto show shewas unaware time-barred ofthe substituted for fictitious againstparties to two-year statuteClaims subject asserted Petition for mandamusgranted, to grant court motionto trial directing dismiss. TalbottEx parte , no. 1140596(ala. sept. 30,2015) fictitious relation state Parties; Back; immunity Supreme Court From theAlabama rECEnT CiViLdECisiOns R E N R O C E T A L L E P P A E H T that boy’s parents falsely obtainedgirl’s parents’ consent for Parents of minorgirl sued parents ofminorboy, claiming gence andotherclaimsbasedonthe statutes oflimitation. reversedThe court aRule12(b)(6) dismissalon fraud, negli- Limon v., no. Sandlin 1140544(ala. 23,2015) Oct. statute ofLimitations; savings Clause was evident, andthusprobable prejudice was notshown. caused plaintiff to exercise orthat strike bias apreemptory evidence establishingthat atruthful answer would have defendant inacivilcasewas properly denied. There was no to answervenire-person truthfullywhethershehadbeena breach thereof. for Motion basedonfailure newtrial ofa testimonyers requires asto expert thestandard ofcare and professional negligence matters againstreal-estate apprais- testimony that extended rulerequiring for expert The court Appraisals, Inc. , no. 1140555(ala. 23,2015) Oct. Riverstone Development Co., Inc. v. &Associates Garrett misconduct Professional negligence (appraisers); Juror and was not improperly tardy. motion, which properly brought this evidence to the court, stantial evidence of asbestos-containing in its Rule 59(e) containing status of the subject talc. Plaintiff presented sub- did not inform plaintiff of lack of evidence as to asbestos- summary judgment to defendant, reasoning that the motion In asbestos exposure case, the court reversed trial court’s sept. 30,2015) Krause v. Vanderbilt Minerals, LLC, no. 1121382(ala. Judgment Proceduresummary for suchrelief.the court of overruling decisionswhenalitigant prior hasnotasked tween Justices Murdock andShaw, regarding thepropriety inconcurrenceteresting anddissent be- parry-and-thrust of treatment are notsubsumedby theAMLA. There isanin- thecoursesexual during assaultclaimsallegedlyoccurring overruled v.The Mock court Allen,783So. 2d828(Ala. 2000); VanderwallEx parte , no. 1130036(ala. sept. 30,2015) not subsumedinto amLa sexual abuse Liability; ofPatientmedical tain state ofmind” thenewlocaleone’s asto making home. tion to abandon one’s former domicileassuch,and(2)a “cer- town hernewdomicileonlyifsheshows (1)adecidedinten- Code §11-46-38(b), acollege student makesthecollege for determining residency to eligibility In vote underAla. v.Horwitz Kirby, no. 1130246(ala. sept, 30,2015) (students) determination ofdomicile Elections; provision ofAla.Code (not merely fraud claims)could besaved underthetolling withinthetwo-year period, andthusthat allclaims action leged that plaintiffs could nothave discovered thecauseof to herparents many months later. Complaint adequately al- theyclaimed, daughter after the causeofaction, confessed withoutparental consent.abortion Girl’s parents discovered ostensibly to seeBroadway shows, to obtain butactually girl to accompany boy andboy’s parents to ontrip New York, Paul andEleanor’s argument that theoutrageous conduct granted arbitration onallclaimsexcept outrage, accepting movedAmeriprise to compel arbitration; court thetrial Eleanor sued, alleging breach ofcontract, fraud andoutrage. refused to pay accounts to Paul andEleanor. Paul and died, After Charles askidnapped. Ameriprise Charles ported the changewas made, butlater andre- contacted thesheriff to Paul andEleanor. represented Ameriprise to themthat using thePOA, changedeath beneficiaries hadAmeriprise executed apower ofattorney appointing Paul asagent. Paul, anyering controversies may“that between us.” arise Charles agreedCharles to arbitration agreement, inAmeriprise cov- (ala. 30,2015) Oct. Inc. Financial Services, v.Ameriprise Jones,no. 1140893 arbitration; non-signatories 6-2-3. www.alabar.org 53 T H E Alabama Lawyer 54 T H E Alabama Lawyer January 2016 representative.” approval may ...pay ofcourt, compensation ofthepersonal ized by thewill, apersonalrepresentative, prior onlyafter § 43-2-844(7)makesplainthat, “[u]nless expressly author- 114, 122(Ala. 2012).Ruttenberg the daughters inlight ofRuttenberg v. Friedman , 97So. 3d should reconsider ofdenying thepropriety interest claimsof settlement. Onrehearing, thePRsargued that thecourt fund interest, any timebefore whichcanbeasserted final because, underAla.Code two-year statute oflimitations didnotapplyto that claim those fees (incontravention ofAla.Code which theyreceived before approval obtainingcourt for § 43-2-848(a).PRs, however, owed estate interest onfees PRs inadministration of$35+millionestate, underAla.Code $1.9millioncompensation affirmed awardThe court paidto rehearing 30,2015) Oct. Wehle v. Bradley , no. 1101290(ala. march 14,2014,on Compensation Estates; Personal representative contract. the agreement even extended to claimsnotrelating to the ment was broad enoughto cover outrage claims, because changing thedeath beneficiary, and(2)arbitration agree- underCharles’sbecause Paul acting was purportedly POA in theirclaims, to support status ofthecontract was necessary concluding that (1)Paul andEleanor’s beneficiary third-party versed asto thedenialofarbitration ontheoutrage claim, existed independent ofany contract. re- The supreme court custody orcontrol,” “your work” andcontractual exclusions). release insurer from defense obligation (includingthe “care, exclusions,preting policy exclusions four policy didnot demnify questionsremained; (2)given narrowness ofinter- to defend question was appropriate, even to in- thoughduty onduty icy, concluded: (1)Rule54(b) certification thecourt defense obligations underinsured’s andindemnity CGL pol- course ofinsured’s by insurer DJaction concerning In work. scannerwas damagedin scanner; andmoveto inspect CT Insured hadbeensuedby vendor whichhadhired insured LLCElectronics, , no. 1140908(ala. nov. 6,2015) CasualtyMid-Continent Company v. Advantage Medical CgL insurance (Continued from page53) § 43-2-509,PRswere obligedto re- did notdecidetheissue, and § 43-2-844(7); R E N R O C E T A L L E P P A E H T not a persuasive defense to the forum selection clause. the mandate of was subsumed into damus relief, reasoning: (1) the “seriously inconvenient”circuit issue court granted transfer. The supreme court granted man- and (2) transfer was appropriate for ously inconvenient” and thus the clause was not enforceable, Etowah County, arguing that (1) the Tuscaloosa forum was the“seri- mandate in action be transferred from Etowah to Tuscaloosa County. After forum-selection clause was enforceable and required that an In LLC Riverfront, Ex parte , no. 1131061(ala. nov. 6,2015) Venue; mandate oftheCourt ties and counsel notice and opportunity to state positions. trial court’s answering jury question without providing par- by motion for mistrial while jury was deliberating, based on Circuit court erred by denying motion for new trial, preceded Ross v., no. Marion 1140604(ala. nov. 6,2015) newmistrial; Trial raised or circumstances render the document unreliable. allows introduction of copy unless question of authenticity is evidence merely because the original was available; Rule 1003 Trial court improperly refused to admit copy of document into 2141406 (ala. Civ. app. 3,2015) Oct. Pepin Manufacturing, Inc. v. ESwallow USA, LLC, n0. EvidenceBest (Copy of document) Court of Civil Appeals From the Alabama required only common knowledge. was notsoapparent asto beunderstood by alayperson and standard ofcare for thenurses. Want orlackofcare ofskill testimony toexpert establishabreach oftheapplicable rendered judgment for defendants. Plaintiffs didnotpresent regarding ofhospitalnursesand action actions ical liability reversedCourt a$7.5millionjudgment for plaintiff inmed- (ala. nov. 13,2015) Inc. HealthServices, v.Brookwood , no. Borden 1131284 Liability medical Riverfront I , 129 So. 3d 1008 (Ala. 2013), the court held that a Riverfront I Riverfront I Riverfront I , the loser moved to transfer back to , and (2) , and revisiting it would violate forum non conveniens forum non conveniens was . The USAA (Kramer’s offered carrier) $200,000 limits;SFadvanced Browns andSF(theirUMcarrier). (tortfeasor) suedKramer Civ. app. 9,2015) Oct. State Farm Mut. Auto. Ins. Co. v. Brown , no. 2140316(ala. um; reimbursement under Ala.Code toest are the10-year subject statute for recovery oflands two-year statute ofinter- oflimitations, butclaimsofpriority Claims regarding offoreclosure validity to saleare subject 9,2015) Oct. LLCFSRJ Properties, v. Walker, no. 2140648(ala. Civ. app. real Property mandate isprocedural, notjurisdictional. withinthesame30days,on thetaxtribunal butthat latter sion ofthetaxtribunal. sentenceThe next requires service notice within30days to thecircuit ofthedate court ofdeci- theappealby filinga willperfect decision ofthetaxtribunal Under Ala.Code Civ. app. 3,2015) Oct. Dept.ofRevenue Alabama , no.Ex parte 2140926(ala. Taxation; appeals § 6-2-33(2). § 40-2B-2(m)(2), a party seeking to appeala seeking aparty § 40-2B-2(m)(2), the total sum ofdamagesto whichtheywere entitled.” ceived, pursuant to State Farm’s Lambert tive damagesfrom Kramer, theBrowns unquestionablyre- “Although theBrowns were legallyentitled to recover puni- SF was obligated to pay the$10,000punitive damages. Held: USAA deposited Browns $80,000into court. contended that punitive damages. there Because was nopunitive coverage, returned verdict for and$10,000 $80,000compensatory the $200,000underLambert the declaration. to which it has been allocated without proper amendment to Limited common element cannot be separated from the unit v.Dorsett , no. Singla 2140503(ala. Civ. app. 9,2015) Oct. Condominium Law as apetitionfor mandamusfor untimeliness. civil sanction. refused toThe treat court theimproper appeal not anappealableorder aseitherafinalorder oran(alleged) vide paneloffour physicians underAla.Code Order granting motionto compel employer and TPA to pro- Civ. app. 9,2015) Oct. Meadwestvaco Corporation v. Mitchell , no. 2140315(ala. Workers’ Compensation and opted outunderLowe. Jury advance, more than 25-5-77(a) was www.alabar.org 55 T H E Alabama Lawyer 56 T H E Alabama Lawyer January 2016 Calendaring error by counsel does not justify a Rule 41 30,2015) Oct. dismissal. Progressive Ins. Co. v. Brown , no. 2140778(ala. Civ. app. underrule 41 dismissal bama but his work was not principally localized in any state. 25-5-35(d) because his contract for hire was executed in Ala- employment status. Employee could recover benefits under § employee’s right to terminate on 30 days’ notice suggested ited control over manner or means of performance, and (2) test, including (1) employer policies on touching loads exhib- employee (vs. independent contractor) under multi-factor Substantial evidence supported conclusion that driver was app. 16,2015) Oct. v.Jenkins AmericanTransport, Inc. , no. 2140153(ala. Civ. tractor; Extraterritoriality Workers’ Compensation; independentCon- 117(b). The trial court and the CCA rejected that argument. sure” standard for occupational disease in court rejected that argument based on the “date of last expo- work, she was on FMLA leave and received STD benefits. The filing a claim was tolled during the time, after her last date at Employee argued that her two-year statute of limitations for 16, 2015) v.Martin Austal USA, LLC, no. 2140662(ala. Civ. app. Oct. Limitations Workers’ Compensation; statute of which wages are no longer subject to exemption. this case notes a 2015 statute (not applicable to the case) under only an exemption of up to $1,000 in the aggregate. Ed. note: wages not exceeding $1,000; the judgment defendant receives tution, are not exempt so as to allow a recurring exemption for from garnishment under Art. X, Sec. 204 of the Alabama Consti- Periodic wages, which can be subject to the $1,000 exemption Civ. app. 30,2015) Oct. TelcoAlabama Unionv. Credit , no. Gibbons 2140604(ala. Personal Exemption Property mence arbitration after was compelled. with prejudice, giving after plaintiffs four months to com- didnotabuseitsdiscretionCircuit indismissingaction court app. 30,2015) Oct. v.Cartee , no. Community Bank Spirit 2140650(ala. Civ. arbitrationrule 41dismissal; (Continued from page55) Ala. Code R E N R O C E T A L L E P P A E H T § 25-5- district court. district limitofthe ofnomorecircuit thanthejurisdictional court judgment to to recovery thecircuit inthe court trict-court Ala.R.Civ. P ., limitsaplaintiff whoappealsadis- Rule 13(j), 2015) Nunnelley, no.Ex parte 2141035(ala. Civ. app. nov. 6, amendments ondamages appeals; Court Post-appealdistrict facially unconstitutional. andby theentirety extension oftheGVA,subsection, is visitation basedonthebestinterests ofthechild. Thus, that judicial review ofparental decisionsregarding grandparent due process unconstitutional by authorizing impermissibly child. Ala.Code grandparent thebestinterests visitation serves ofhisorher Custodial parent hasafundamental rightto decidehow Weldon v. Ballow unconstitutional grandparent Visitation Held act tax assessment. controls§ 41-22-1,actually theappealfrom anad valorem that theAlabama Administrative Procedure AAPA”), (“the Act 30 days to betimely. dissented, JudgeDonaldson arguing oftheboard ofequalization within andthesecretary court which anotice ofappealmustbefiled withboththecircuit ment for failure to proceed underAla.Code dismissedanappealfrom anadvaloremCourt taxassess- 2140297 (ala. Civ. app. nov. 13,2015) Target Corp. v. ofEqualization Board JeffersonCounty , no. Tax appeals ofinrem deprived circuit action court cuit court Federal seizure to prior thefilingof cir- adoptionofproperty 2015) Gray v. ofOpelika City , no. 2140658(ala. Civ. app. nov. 6, forfeiture Procedure permanent improvements Wall hadmadeto theproperty. premiums regarding theproperty Wall hadpaidorfor the dence was notrequired to reimburse Wall for theinsurance orderIn to from redeem ataxsaleto real property Wall, Ca- 2140683 (ala. Civ. app. nov. 6,2015) Wall to Wall Inc. v. Properties, Cadence, no. N.A. Bank, Tax redemption sale § 30-3-4.1(d)deprives custodial parents of , no. 2140471 (ala. Civ. app. Oct. 30, 2015) § 40-3-25,under jurisdiction. taliated againstthe employees by them. firing legally interfered with itsemployees’ andre- unionactivities back pay awards to employee union organizers. Employer il- theboard’s affirmed Court reinstatement injunction, and Cir. 13,2015) Oct. NLRB v. Medical Transport, Allied Inc., no. 14-15033(11th Labor relatingernor to passageoftheAlabama Accountability Act. tives, thecurrent Governor ofAlabama andtheformer gov- Tempore, theSpeakerofAlabama HouseofRepresenta- filesoftheAlabama Senate Presidentpoenas seeking Pro abuseditsdiscretion inrefusing court to quashsub- District , no.In reHubbard 13-10281etal. (11thCir. 14,2015) Oct. alabama Politics; discovery was to faciallyunconstitutional.odic hearing assesscapacity disabledpersonswithoutprovidingof intellectually aperi- Florida’s schemefor theinvoluntary statutory confinement J.R. v., no. Hansen no. 12-14212(11thCir. 15,2015) Oct. Constitutional disability; Lawintellectual Appeals Circuit of Court From theEleventh tions obviously excessive. establishedinthiscontextclearly to render theofficer’s ac- qualified immunity. The constitutional standard was notso to disablethesuspect’san effort vehicle, was entitled to chase, where theofficer shotfrom aninterstate overpass in inahigh-speed driving whoshotafleeingsuspect Officer Mullenix v. Luna, no. 14-1143(u.s. nov. 9,2015) immunity qualified Court States Supreme From theUnited trict court’s grant of summary judgment to employer. the enrolling of ineligible students. The court affirmed the dis- fired after discovery of recruiting violations which resulted in tion following his termination. Employer contended he was Former football coach sued under Title VII for racial discrimina- 2015) Flowers v. Troup, no. County 14-11498(11thCir. 16, Oct. Employment a challengeto that specific provision. trate isenforceable, onlyto review retain jurisdiction courts threshold determination ofwhethertheagreement to arbi- Where arbitration agreement delegates to thearbitrator the 2015) Parnell v. CashCall, Inc., no. 14-12082(11thCir. 28, Oct. agreement Validity arbitration; delegation to arbitrator of speech not entitled to First Amendment protection. public concern. Held: Memorandum constituted professional their memorandum amounted to citizen speech on a matter of about poor leadership and mismanagement. Plaintiffs claimed mitting a memorandum to university officials complaining Plaintiffs claimed they were terminated in retaliation for sub- 14149 (11thCir. 29,2015) Oct. Alves v. ofRegents Board ofUniv. System ofGa. , no. 14- first amendment; Public Employment car was notexcessive force. being runover by car, soofficer’s weapon firing to stop the would have perceived that hewas inimminent dangerof reversed; ofqualifiedimmunity Denial reasonable officer Singletary v. Vargas Excessive immunity; qualified force , no. 14-14424 (11th Cir. Oct. 29, 2015) www.alabar.org 57 T H E Alabama Lawyer 58 T H E Alabama Lawyer January 2016 defendant’s apprehension. ofhidingagundidnotpreventhended, andhisact other the police were other defendant madeafter was appre- required for proof False underhisindictment. statements to did notprovide “criminal assistance” to anotherdefendant as prosecution, aviolation ofAla.Code reversedCourt thedefendant’s conviction for hindering Collier v. State, Cr-13-1937(ala. Crim. app. 2,2015) Oct. ProsecutionHindering place of statement after accomplice denied making it. fendant failed to confront the accomplice regarding time or defendant did not lay a proper predicate for its admission. De- garding an accomplice’s statement to a fellow inmate, because Trial court did not err in excluding impeachment evidence re- Collins v. State impeachment granted hearing. thepetitionfollowing anevidentiary Rule32petition,becauseit sented inhistime-barred garding thedefendant’s request for equitabletolling pre- Trial was required re- court to makespecificfindingsoffact State v. Hurst,Cr-14-0726(ala. Crim. app. 23,2015) Oct. rule 32;Equitable Tolling AppealsCriminal From of theCourt rECEnT CriminaLdECisiOns Rule 32petition, becausehesufficiently pleadedthat the dismissalofthe defendant’s reversedCourt the summary 2015) Reynolds v. State, Cr-13-1907(ala. Crim. app. sept. 18, rule 32;Brady total closure. interestriding that [was] likelyto beprejudiced” to justify victim’syear-old state testimony; failedto provide an “over- Trial the14- during erred thecourtroom inclearing court 2015) v.Demouey State, Cr-14-0289(ala. Crim. app. sept. 18, Courtroom Closure (Continued from page57) , Cr-13-1199 (ala. Crim. app. Oct. 23, 2015) § 13-10-43,becausehe R E N R O C E T A L L E P P A E H T an allegedagreement withaprosecution witness. state failedto produce to exculpatory evidence pertaining his death. may have victim onlyinjuredstriking him anddidnotcause convicted ofmanslaughter, evidence was presented that his sault asalesser-included offense, because, thoughhewas onthird-degree as- Trial jury erred innotinstructing court 2015) v.McDaniels State, Cr-13-1624(ala. Crim. app. sept. 18, Lesser-included Offenses behalf before issuedsentence. court thetrial to makestatementwas notgiven onhisown opportunity becausedefendantNew sentencing was hearing necessary 2015) v.Green State , Cr-14-1083(ala. Crim. app. sept. 18, allocution under thestatute. hewas nota the localpolice department, “school employee” defendant’s argument that, becausehewas employed by employee, aviolation ofAla.Code asaschool student undertheageof19years whileserving source officer’s conviction for with a engaging inasex act aschoolre- affirmed acaseoffirstimpression,In the court 2015) v.Bonds State, Cr-13-1570(ala. Crim. app. sept. 18, withstudentsexual activity question. jury constituted acivilbreach andintent ofcontract ortheft, isa Defendant’s intent was determinative whetherhisactions which constituted acontractual matter rather thanacrime. beforedictment for trial failure to pay fundsto abusiness, Trial to dismissdefendant’s hadnoauthority court in- theft 2015) State v. Walker, Cr-14-0765(ala. Crim. app. sept. 18, dismissal indictment ofthesentence.out imposingterm ofprobation aspart Split sentence underAla.Code 2015) Goldsmith v. State, Cr-14-1156(ala. Crim. app. sept. 18, split sentence act § 15-18-8was improper with- § 13A-6-81. It rejected the § 13A-6-81. It L Died: August 28,2015 Admitted: 1964 Pine Level Cruse, Lee Jerry Died: September27,2015 Admitted: 1969 Tuscaloosa Costello, Leo Edwin Died: May 22,2015 Admitted: 1979 Tuscaloosa michael Coleman, Charles Died: March 4,2015 Admitted: 1949 Tuscumbia Elmore, Jr. Carmichael, Charles Died: March 27,2015 Admitted: 1952 Ashville augustus fitzhughBurttram, Died: September2015 Admitted: 2013 Birmingham Bennett, Charlotte Pool 24,2015 Died: October Admitted: 1980 Vestavia Baskerville, James Victor Died: October 25,2015 Died: October Admitted: 1978 Birmingham mcabee, frank Timothy 20,2015 Died: January Admitted: 2010 Broken Arrow, OK Lemarr, Brad Elliott Died: May 22,2015 Admitted: 1968 Prattville Koch, alan goodman 23,2015 Died: October Admitted: 1977 Montgomery Jemison, mays russell 10,2015 Died: October Admitted: 1957 Guntersville Huffstutler, John Terry, Jr. 22,2015 Died: October Admitted: 1976 Birmingham Harris, James Edward Died: August 10,2015 Admitted: 1999 Birmingham gilmore, frank Clark, iii S L A I R O M E M Died: September 5, 2015 Admitted: 1960 Vestavia Henderson Walston, robert Died: September 30, 2015 Admitted: 2005 Birmingham Tedford, Jr. Taylor, Everette Died: September 23, 2015 Admitted: 1974 Abbeville Blacklidge, Jr. riley, Wesley 4,2015 Died: October Admitted: 1967 Montgomery Pettigrew, Jamie Lucille Died: September 5, 2015 Admitted: 1974 Gulf Shores Berry, Jr. Hon. norton, Thomas Died: September 27, 2015 Admitted: 1977 Mobile david ashleynihart, www.alabar.org 59 T H E Alabama Lawyer 60 T H E Alabama Lawyer L L L L L L L January 2016 Probate Court filing–mobileElectronic County Balloting andElectronic notice ofElection to award theBar service William d. “Bill” scruggs, Jr. Professionalism award J. anthony “Tony” mcLain awardLocal Bar ofachievement Judicial award ofmerit alabama Lawyers’ Halloffame presiding federal district court judgesof presiding federal court district member appointed by eachofthethree ber appointed by thechiefjustice, one dent oftheAlabama State Bar, amem- consisting oftheimmediate pastpresi- 1, 2015. five newest members were inducted May come members of the hall of fame. The 2004. Since then, 50 lawyers have be- first induction took place for the year tee report was approved in 2003 and the board of bar commissioners. The commit- then to provide a recommendation to the study the concept, set up guidelines and Fred Gray. He appointed a task force to during the term of state bar President Alabama Lawyers’ Hall of Fame originated tory of the state of Alabama. alizing the many great lawyers in the his- should be turned into a museum memori- state bar building and vacant at that time, supreme court building, adjacent to the more with a proposal that the former Brown wrote state bar President Sam Ru- 2000 when Montgomery attorney Terry idea for a hall of fame first appeared in cated at the state judicial building. The bama Lawyers’ Hall of Fame which is lo- new members are inducted into the Ala- FameOf Lawyers’ Hall Alabama A 12-member selection committee A 12-memberselection The implementation of the idea of an May is traditionally the month when S E C I T O N T N A T R O P M I files of all inductees arefiles ofallinductees found onthe rotunda ofthejudicial buildingandpro- the inductees are located in the lower information. Plaques commemorating website and submitting the requested the nomination form from the bar’s throughout the year by downloading nominated. Nominations can be made cannot be chosen if they have not been lawyers for consideration. Great lawyers of historic figures as well as present-day tion of inductees. We need nominations and the general public for the nomina- its suggestions from members of the bar the more recent lawyers ofthestate. recognition to historic figures aswell as minimum of100years to give due musthaveductees beendeceased a for eachyear, at leastoneofthein- years Also, at thetimeoftheirselection. must have beendeceased at leasttwo professional success. Eachinductee ice, mentorship, politicalcourage, or forms ofachievement−leadership, serv- demonstrated through many different guished career inthelaw. This could be Hall ofFame musthave hadadistin- for induction. sider thenomineesandmakeselections bama State Barmeetsannuallyto con- and theexecutive oftheAla- secretary Society, andBarHistorical abama Bench Archives andHistory, thechairofAl- of rector oftheAlabama Department the board ofbarcommissioners, thedi- Alabama, four membersappointed by The selection committee actively solic- to theAlabama Lawyers’Inductees tributions totributions theircommunities. Awards willbepresented recognizes localbarassociations for theiroutstanding con- Achievement Local BarAward of Nominations may be supported with letters of endorsement. tion(s) the nominee has made to the administration of justice. the nominee and a narrative outlining the significant contribu- be presented inany given year. toers withrespect anomineeorwhethertheaward should makes arecommendation to theboard ofbarcommission- tee appointed by thepresident ofthestate bar, whichthen seal and the year of presentation. cipient is presented with a crystal gavel bearing the state bar nificantly to the administration of justice in Alabama. The re- trial or appellate, who is determined to have contributed sig- to a judge who is not retired, whether state or federal court, award is not necessarily an annual award. It must be presented through ceive nominations for the state bar’s Judicial Award of Merit Merit Judicial Award of Form-2016-fillable.pdf assets/uploads/2014 /08/Lawyers-Hall-of-Fame-Nomination- alabama-lawyers-hall-of-fame/2014-lawyers-hall-of-fame/. bar’s website at https://www.alabar.org/ membership/ The Alabama State BarLocal BarAward ofAchievement Nominations should include a detailed biographical profile of Nominations are considered commit- by athree-member The Judicial Award of Merit was established in 1987. The AL36101-0671 Montgomery P.O. Box 671 Board ofBarCommissioners Keith B. secretary Norman, The Alabama State Bar Board of Bar Commissioners will re- The deadlinefor submissionismarch 1,2016. AL36101 Montgomery P.O. Box 671 Alabama Lawyers’ HallofFame RumoreSam Download an application form at march 15, 2016 and mail the completed form to: . Nominations should be mailed to: https://www.alabar.org/ or [email protected]. or obtainedbyButlerat Christina (334)269-1515 contacting 2016. must complete and submit an award application by may 6, ants for eachcategory: mediumorsmall.their size-large, Resort–Baytowne andBeach Golf Sandestin Wharf. theAlabama Stateduring Bar’s at 2016Annual the Meeting should bepresented inany given year. tomissioners with respect anomineeorwhether theaward which makesarecommendation to theBoard ofBarCom- professionalism by living members of the Alabama State Bar. long-term and distinguished service in the advancement of service to the Alabama State Bar by recognizing outstanding, age the emulation of his deep devotion to professionalism and Award is to honor the leadership of Tony McLain and to encour- available at www.alabar.org should beprepared ontheappropriate nomination form Professionalism Award through april 15,2016.Nominations will receive nominations for theJ. Anthony “Tony” McLain Award Professionalism “Tony” McLain J. Anthony To considered be for thisaward, barassociations local The degree ofenhancements to thebar’s imageinthe • ofthebar’s andextentoftheimpact The quality partici- • The by degree theindividualbarinad- ofparticipation • The following willbeusedto criteria judgethecontest- Local barassociations compete for theseawards basedon Nominations are considered committee by afive-member The purpose of the J. Anthony “Tony” McLain Professionalism AL36101 Montgomery P.O. Box 671 Alabama State Bar Executive Director Keith B. Norman The Board ofBarCommissioners oftheAlabama State Bar community. and pation onthecitizens inthat community; vancing programs to benefitthecommunity; Applications may be downloaded from and mailedto: www.alabar.org www.alabar.org 61 T H E Alabama Lawyer 62 T H E Alabama Lawyer January 2016 should bepresented inany given year. tomissioners withrespect anomineeorwhethertheaward which makesarecommendation to theBoard ofBarCom- State Barasanorganization. ice by livingmembersofthebarthisstate to theAlabama presented inrecognition ofoutstandingandlong-term serv- The award isnotnecessarily anannualaward. mustbe It behalf ofthebarformer state barPresident BillScruggs. ofandaccomplishments on in 2002to honorthememory form available at www.alabar.org tions shouldbeprepared ontheappropriate nomination to theBarAwardService through april 15, 2016. will receive nominations for the William D. “Bill” Scruggs, Jr. To theBarAward Scruggs, Jr. Service William D. “Bill” who wish to vote by paper ballot should notify the secretary in notified by email with a link to an electronic ballot. Members 2016 andendingFriday, May 20,2016. of theseofficers willbeheldbeginning Monday, May 16, oftheBoardMembers ofBarCommissioners and ofPresident-elect Rules Governing andSelection Election Balloting And Electronic Notice ofElection (Continued from page61) Nominations are considered committee by afive-member to theBarAwardThe Service BillScruggs was established AL36101 Montgomery P.O. Box 671 Alabama State Bar Executive Director Keith B. Norman The Board ofBarCommissioners oftheAlabama State Bar On the third Monday in May (May 16, 2016), members will be Notice isgiven here pursuant to theAlabamaState Bar and mailedto: that theelection Nomina- S E C I T O N T N A T R O P M I lowing the opening of the election. Bar by 5:00 p.m. on the Friday (May 20, 2016) immediately fol- electronic) must be voted and received by the Alabama State commissioner) and run-offs, if necessary. All ballots (paper and cient for all contested elections (president-elect and questing a paper ballot. A single written request will be suffi- writing on or before the first Friday in May (May 6, 2016) re- All terms willbefor three years. nolater by thanMarch 15, 2016. the secretary cies certified will bedetermined by acensus onMarch 1,2016andvacan- commissioner positionsfor theseandtheremaining circuits members ofthestate offices barwithprincipal therein. New State Bar no later than 5:00 p.m. on February 1, 2016. petitions must be filed with the secretary of the Alabama least 25 Alabama State Bar members in good standing. Such membership. Candidates must be nominated by petition of at 1, 2016, and shall possess a current privilege license or special bers in good standing of the Alabama State Bar as of February ofPresident-Elect nomination andElection their principal officestheir principal inthefollowing circuits: Commissioners of Board ofBar nomination andElection Additional for commissioners willbeelected each300 Judicial Circuit 37th JudicialCircuit 32nd JudicialCircuit, Place 1 28th JudicialCircuit 26th JudicialCircuit 25th JudicialCircuit, Place 3 23rd JudicialCircuit, Place 4 15th JudicialCircuit, Place 3 15th JudicialCircuit, Place 1 15th JudicialCircuit 14th JudicialCircuit, Place 4 13th JudicialCircuit, Place 3 13th JudicialCircuit, Place 6 10th JudicialCircuit, Place 3 10th Candidates for the office of president-elect shall be mem- Bar commissioners will be elected byBar commissioners willbeelected thoselawyers with 7th Judicial Circuit 7th Judicial Circuit, Place 1 6th Judicial Circuit 5th r JudicialCircuit 3rd s JudicialCircuit 1st submitted by theappropriate deadlineandaddressed to: applications for at-large commissioner positionsmustbe submission ofnominations due by 1,2016. April which are by elected theBoard ofBarCommissioners, are place numbers: 2,5and8.Applications for thesepositions, ofat-LargeElection Commissioners than 5:00 p.m. on the last Friday in April (April 29, 2016). received by the secretary of the Alabama State Bar no later Nomination forms and/or declarations of candidacy must be be held or by the candidate’s written declaration of candidacy. with principal offices in the circuit in which the election will tion bearing the signatures of five members in good standing Montgomery AL36101 Montgomery P.O. Box 671 Alabama State Bar Secretary Keith B. Norman Nomination forms, forms declarationsand ofcandidacy At-large for commissioners willbeelected thefollowing A candidate for commissioner may be nominated by peti- at www.alabar.org. receives formby thenomination thedeadline.secretary org [email protected]. Stacie Vitello, JudicialDivisionchief, at (251)574-6008or for more information. For more information, pleasecontact County’sMobile website at www.probate.mobilecountyal.gov shouldreview theProbatetraining onsaidservice of Court 4,2016.All lawyers interested and on January inthisservice County’s ofMobile Court publishedpoliciesandprocedures, pleadings filedelectronically, inaccordance withtheProbate County ofMobile commenced theacceptanceCourt of Supreme notice ishereby Court, given that theProbate Probate Court CountyMobile Filing–Electronic Election rulesandpetitionsforElection allpositionsare available isthecandidate’sIt to confirm the responsibility that These forms may alsobesent by emailto elections@alabar. Pursuant to theJune23,2015order oftheAlabama or by faxto (334)261-6310. www.alabar.org L 63 T H E Alabama Lawyer 64 T H E Alabama Lawyer January 2016 institute, visit www.ali.state.al.us. For more information about the [email protected] Balch & Bingham LLP Othni J. Lathram Gregory Butrus Co-authored by well as other priorities. practices and technology of the day, as constantly evolving to keep up with the Title 17. This is an area of the law that is (FCPA), which is located in Chapter 5 of bama Fair Campaign Practices Act These activities are governed by the Ala- raising and spending of campaign funds. items they must vigilantly track are the pare for these elections, one of the many district attorneys. As the candidates pre- court, circuit and district courts and all bama, including seats on the supreme attorneys will be on the ballot in Ala- of offices that are especially important to sional races that are unfolding, a number tion to the Presidential and Congres- midst of a general election year. In addi- Campaign Finance Laws The Continuing Evolution of As the new year begins, we are in the P U U P A R W E V I T A L S I G E L June 12, 2015 (Act No. 2015-495), and nor Bentley signed this bill into law on the state’s campaign finance laws. Gover- with the power to interpret and enforce vests the Alabama Ethics Commission tive resolution. The revised FCPA now by a study committee created by legisla- tions made as part of a two-year review these revisions came from recommenda- or outdated provisions. The majority of revisions to clarify and simplify confusing sions of the FCPA while also making other cant changes to the enforcement provi- the FCPA. These revisions make signifi- enth amendment in the past six years to Arthur Orr. This new law marks the sev- act: Senate Bill 241, sponsored by Senator ture passed the latest amendment to the On June 4, 2015, the Alabama Legisla- sponsible for: quirements oftheFCPA. The Ethics Commission isalsore- ofstate re- towith thesecretary implement thereporting Commission new for responsibilities theEthics changes set forth in this legislation include: these revisions took effect September 1, 2015. The significant Investigating regarding andholdinghearings allegedvi- • Approving amanualthat shallbepublishedby thesec- • Approving aretention for allFCPA policy and reports • Suggestingaccounting methodsfor candidates and • Approving allforms required by theFCPA; • The Ethics Commission isnow responsible for working olations oftheFCPA; requirements oftheFCPA; ofstate forretary candidates andPACs the anddescribe filings; PACs; +1% , %8 ,' !%1% +%5 , - *"6 %7 %!- *4 5 6%1 *+%- %1%3 , *",' .+%+ , - *+% ,% *+1%$ %'2!11 "*+ , -.+% /0% (and staff) Composition oftheEthics Commission sion after January 1,2016,thecommission musthave one January sion after Prescribing, publishingandenforcingout rulesto carry • opinionsonthere- Issuingandpublishingadvisory • investigations Conducting andordering auditsincon- • Referring allevidence andinformation to theattorney • Affirming, settingasideorreducing civilpenalties; • auditsofFCPA orauthorizing Conducting filingsupon • Beginning with the first vacancy ontheEthics Commis-Beginning withthefirstvacancy the directives oftheFCPA. quirements oftheFCPA; and tion oftheFCPA; withacomplaint orotherfilingallegingnection aviola- of any violation criminal oftheFCPA; general attorney orappropriate for district prosecution discrepancy; the filingofacomplaint ortheexistence ofamaterial " #$ %& '"! ("$"#) ! www.alabar.org 65 T H E Alabama Lawyer 66 T H E Alabama Lawyer January 2016 date ofexpenditure isthedate payment. oftheelectronic Forcheck. expenditures madeby payment, electronic the thedatemade by ofexpenditure check, isthedate onthe the instrument authorizes theexpenditure. For expenditures When Expenditure is made receipt of: istheearlier contribution. For thedate contributions madeby of check, the recipient ofthecontribution isableto makeuseofthe receipt ofContribution 90-day notice ofintent mail.90-day by certified ofstateendar year firstprovides solongas thesecretary a minate aPAC that hasmaintained azero balance for onecal- Termination ofdormant PaCs the account must be disposed in accordance with state law. solved by the candidate’s personal representative. All funds inof serving in this capacity, the campaign account shall be dis- capacity of the candidate. If the designated person is incapable her principal campaign committee in the event of death or in- Closing ofPCC death ofCandidate after ture” undertheFCPA. for ofreporting purposes feesqualifying hire upto eight full-timeinvestigators (upfrom six). limited to one). The director ofthecommission may now ceedings brought by oragainstthecommission (previously neys to orpro- work onbehalfofthe commission inactions of theattorney general) may now appoint agroup ofattor- at leasttwo terms ofoffice. The commission (withapproval member whoisaformer publicofficialwhoserved elected (Continued from page65) The date that the check was deposited into the recipient’s• Ten days from thedate that thecheckcamewithin • An expenditure isconsidered to bemadeonthedate that The date ofreceipt ofacontribution isthefirstdate that The secretary ofstateThe isnow secretary authorized to dissolve orter- A candidate must designate an individual to dissolve his or The payment ofqualifyingfees isnow an clearly “expendi- account. recipient’s control; or P U U P A R W E V I T A L S I G E L may beexpended. held” isnow for anexplicit purpose whichcampaign funds reasonably related thedutiesofoffice to performing inal prosecution orinvestigation resulting from “conduct Legal fees and usechecks. the law onlyallowed acandidate to have account achecking debit cards, credit cards transfers. andelectronic Previously, orsimilaraccountmake useofamoneymarket andmay use Candidate’s account Bank plies to state candidates andstate PACs. to county candidates andcounty PACs inthesame way itap- the languageofFCPA whetherthe$5,000 threshold applies isloweredports from isnotclearfrom $10,000to $5,000.It filingElectronic Threshold gation even though they had closed their committee. the law suggested that such a public official had a filing obli- cials who have closed their campaign committees. Previously, annual reports even if it did not have any more activity during that time. was required to continue filing daily reports until election day, viously, if a daily report was required on any day, the campaign cific day on which the campaign spends or receives $5,000. Pre- filing ofdailyreports property in the performance of the duties of his or her office. campaign account. If elected, the candidate can also use such dation of such property must be deposited in the candidate’s days following the election. Any funds generated by the liqui- ket value or donated as permitted by the FCPA within 120 with a value of more than $500 must be liquidated at fair mar- ofCampaigndisposal Property Legal fees andcosts associated withanycrim- civilaction, A candidate’s campaign principal committee may now The threshold for filingofcampaign electronic finance re- Annual reports are not required to be filed by public offi- Daily reports are now only required to be filed on the spe- Any property purchased by–or contributed to–a campaign follows: Civil Penaltiesmodified isfiledwithin48hours ofthetimethat itwas due.report ner by that candidate orPAC andthe for cycle that election solongasitisthefirstfailurepenalty to fileinatimelyman- isnotanoffenseto acivil to orsubject fileatimelyreport an offenseto any andisnotsubject civilpenalty. The failure being prompted official hasnotcommitted by anelection without timely-filed report anerrorrect inanotherwise safe Harborfor Correcting reports FCPA reports. filingof civilpenaltiesforlevy the “materially inaccurate” of FCPA reports. The Ethics to Commission hastheauthority civilpenaltiesfor to levy theuntimelyfiling has theauthority fect. ofstateThe orprobate secretary judge(asappropriate) for theissuance penaltieswilltakeef- ofcivilandcriminal Enforcement Provisions date has filed the form as required. ate election official within five business days that the candi- papers. The Ethics Commission must confirm to the appropri- simultaneously with the filing of the candidate’s qualifying ing must now be made with the Ethics Commission terests form by candidates have been changed so that the fil- statement ofEconomic interests date committee orPAC isterminated. probate) andcontinue until filingelectronically thecandi- probate ofthisdecision(inaform prescribed by thejudgeof so, theselocalcandidates andPACs mustnotifythejudgeof ofstate’sretary filingsystem. theychooseto electronic do If tomunicipal) may filetheirFCPA elect withthesec- reports cycle, county candidates2016 election andPACs (otherthan continue to bemadewiththeprobate judge. the During filing system–except for municipalcandidates whichwill ofstate’s mustbemadewiththesecretary ports electronic filingElectronic First offense: Lesser of$300or10percent oftheamount • The violations civilpenaltiesfor are reporting modifiedas toA personwhovoluntarily cor- filesanamended report cycle,anewprocessBeginning withthe2018election The requirements for filing the statement of economic in- cycle,Commencing allFCPA withthe2018election re- not properly reported. Fines may be paid withcampaign funds. must bepaidwithin45days ofany review beingfinalized. islevied. mailwhenapenalty Administrativeelectronic fines probate mailand judgemustnotifythepersonby certified requirements.violate thereporting ofstateThe or secretary that would create arebuttable presumption oftheintent to filingviolation attorney ofafourth torney general ordistrict website. Handbook publish itsAlabamaElection state’s office andotherofficialsresponsible for to elections The of Alabama Law also works Institute with thesecretary sources there to helpexplain theseevolving requirements. www.alabamavotes.gov. There are anumberofusefulre- viewed ofstate’s andsearched at thesecretary site, election abamians regarding All elections. ofthesefilingscanbe chief goaloftheFCPA isto provide better information to Al- FCPA revisions inanumberofareas. andmakeimportant A regarding theFCPA: ofstate ofthesecretary duties istrative rulesto implement andadminister theFCPA. administrative rules byducted theEthics Commission. was mailedto that individual. Further review willbecon- state orprobate judgewithin14days thenotification after seek areview byof filingawritten notice withthesecretary review ofCivil Penalties • The fourth offense The fourth alsoestablishesarebuttable pre- • Third (andsubsequent) offense: Lesser of$1,200 or20 • Secondoffense: Lesser of$600or15percent ofthe • Work cooperatively withtheEthics Commission to fully • civilpenalties;and Levy andcollect • filingsystem; theelectronic Maintain • The secretary ofstateThe orprobate secretary judgemustnotifytheat- These changes should help to clarify many parts ofthe These changesshouldhelpto many clarify parts thefollowing ofstateThe duties shallperform secretary ofstateThe isauthorized to secretary promulgate admin- Any isimposedmay personuponwhomacivilpenalty sumption of the intent necessary forsumption oftheintent violation. acriminal necessary percent oftheamount notproperly reported. amount notproperly reported. implement andenforce allcampaign finance laws. available ontheALI www.alabar.org L 67 T H E Alabama Lawyer 68 T H E Alabama Lawyer January 2016 L E S N U O C L A R E N E G E H T F O S N O I N I P O J. Anthony McLain matter. gross settlement proceeds from that lated to, andto besatisfied from, the claims, where theliensorclaimsare re- liensandsubrogatedbills, statutory liens orclaims, for example, medical gotiation ofthird-party ofareduction an additionalcontingent fee for thene- matter, andinthesamematter charge on thegross recovery orsettlement ofa charge an attorney’s orcollect fee based basis may enter anagreement for, senting fee aclient onacontingency Commission iswhetheralawyer repre- quEsTiOn: Double-Dipping and Lien Reduction The questionbefore theDisciplinary lawyer shall not enter into an agreement disCussiOn: ceeds from that matter. satisfied from, thegross settlement pro- liens orclaimsare related to, andto be liensorclaims, where the third-party for thenegotiation of ofareduction ter charge anadditionalcontingent fee ment ofamatter, andinthesamemat- based onthegross recovery orsettle- for, charge anattorney’s orcollect fee lawyer may notenter into anagreement ansWEr: Rule 1.5(a), circumstances,Absent extraordinary a Ala. R. Prof. C. , requires “[a] fee is clearly excessive: nine factors to be considered when determining whether a for, or charge, or collect a clearly excessive fee,” and identifies a Alawyer shallnotenter into anagreement for, or (a) considered are thefollowing: mining whetherafee isexcessive to be thefactors charge, excessive aclearly orcollect fee. deter- In (6)the nature andlengthoftheprofessional rela- (6)the timelimitations imposedby theclient orby (5)the amount involved andtheresults obtained; (4)the fee customarily for charged inthelocality (3)the likelihood, ifapparent to theclient, that the (2)the time andlaborrequired, thenovelty anddif- (1)the tionship withtheclient; the circumstances; similar legalservices; preclude otheremployment by thelawyer; employmentacceptance will oftheparticular properly; requisite thelegalservice to perform ofthequestionsinvolved,ficulty andtheskill rule 1.5.

fees. |

settlement, orappeal, trial litigation andotherexpenses to or percentages that shallaccrue to thelawyer intheevent of which thefee isto bedetermined, includingthepercentage agreements mustbe “in writing” and “state themethodby other requirements, Rule1.5(c),Ala.R.Prof. these , dictates C. representation. prevalentlarly inpersonalinjury Among inplaintiff’s practice,are andcustomary andparticu- normal a “clearly excessive fee.” vided theydonotcallfor, charge orresult of inthecollection Prof. ofmatters C.,theyare inawidevariety pro- permissible nal defense anddomesticmatters, seeRule1.5(d),Ala.R. (Ala. 1983). While contingent fees are notpermitted incrimi- ofAlabamaSupreme inPeebles Court v., 439So.2d Miley 137 by theclient, are identical to thoseannounced by the provides for consideration ofawritten fee agreement signed These factors, withtheexception ofparagraph (9)which

More thanmerely permissible, contingent fee agreements

| (9)whether there isawritten fee agreement signed (9)whether thefee isfixed orcontingent; and (8)whether experience, reputation, ofthe andability (7)the

by theclient. theservices; lawyer or lawyers performing

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www.alabar.org 69 T H E Alabama Lawyer 70 T H E Alabama Lawyer January 2016 whether or upon what terms to propose or accept a settlement. significant decisions to be made by a personal injury plaintiff is formed decisions about the representation.” One of the most extent reasonably necessary to permit the client to make in- 1.4(b), timely address liens attaching to settlement proceeds. Rule cumstances.” Lawyers may not ethically abdicate their duty sentation,to the limitations must be “reasonable under the cir- claim, this service is a routine element of case management. necessary to reach a settlement of a client’s personal injury dent to normal personal injury representation. Frequently gotiation of a reduction of third-party liens and claims is inci- settlement proceeds from that matter. This is because the ne- claims which are related to, and to be satisfied from, the gross fee for the negotiation of a reduction of third-party liens or matter and in the same matter charge an additional contingent an attorney’s fee based on the gross recovery or settlement of a the client, enter into an agreement or agreements which call for no written agreement to doso. Rule1.5(c),Ala.R.Prof. C. claimsto besatisfied outofsettlement fundsifthere is party medical billsorhospitalsubrogation liensorotherthird- acontingentcollect fee for thenegotiation in ofreductions writing, for itisplainlyimpermissible alawyer to charge or culated.” allcontingent Because fee agreements mustbein are before to bededucted thecontingent orafter fee iscal- frombe deducted therecovery, andwhethersuchexpenses (Continued from page69) BOOKS FOR SALE: While Rule 1.2, However, a lawyer may not, even if in writing and signed by L E S N U O C L A R E N E G E H T F O S N O I N I P O Ala. R. Prof. C. Ala. R. Prof. C. , requires a lawyer to “explain a matter to the , allows for limited-scope repre- Library, to: changes andeffective dates are available at http://judicial.alabama.gov/rules/Rules.cfm. for purchase in the Supreme Court and State Law Library bycashor checkonly. Note: All rule Contact anyPublic Services staff member at (334) 229-0563 with questions. Montgomery AL 36104 300 Dexter Ave. ATTN: Public Services–Book Sale AL Supreme Court and State LawLibrary Please mail acheckor money order, made payable to AL Supreme Court andState Law The 2013Alabama Rules of Court–State 2013 Alabama Rules of Court–State timely seek their reduction in conjunction with settlement. resent the client’s interests requires reasonable efforts to representation. Rather, a lawyer’s obligation to zealously rep- consideration of third-party liens or claims from the scope of matter may not enter an agreement with the client to exclude stances, a lawyer representing a client in a personal injury 4.1(a), the third party’s right to settlement funds therefrom. Rule statement about the settlement status of the related claim or material fact or law to a third-party claimant, including a false after settlement may not knowingly make a false statement of fund doctrine. A lawyer attempting to negotiate a reduction to reduce its lien except as may be required by the common settlement or judgment the lienholder will have no incentive have to face the possibility of receiving no recovery at all, after before settlement the lienholder or subrogated insurer will prior to, rather than after, settlement of a tort claim. Whereas geous time for negotiation of third-party liens or claims is of a protection letter. See Formal Opinion 2003-02. Medicaid liens, or an ethical obligation by virtue of the issuance interest in those funds, for example in the case of hospital or the lawyer has a statutory obligation to protect a third party’s an informed settlement decision. This is especially the case if have in the client’s settlement proceeds, a client cannot make ing rise to the claim, and any legal interest a third party may medical bills or hospital or other liens related to the injury giv- Without an explanation of his or her obligations with regard to It also stands to reason that typically the most advanta- Ala. R. Prof. C books are for sale at $10each. These are available . Therefore, absent extraordinary circum- C. Rule1.5(a)(1),Ala.R.Prof.client claim.See intheunderlying labor thanthat required ofanattorney representing the to representation normal andrequires noadditionaltimeor additional benefitto theclient. This negotiation isincident upon thegross settlement, doessowithoutproviding any settlement proceeds, inadditionto anattorney’s fee based pital orothersubrogation liensto besatisfied from claims, includingmedicalbillsorhos- inthird-party ductions ney’s fee calculated as a percentage of the gross settlement. ing a settlement is compensated for his services by an attor- lawyer negotiating these reductions in the process of reach- quently necessary for the parties to reach a settlement. A coverable pursuant to the common fund doctrine, is fre- to settlement funds, in excess of the amount potentially re- trine. A further reduction in a third party’s lien upon or claim fee paid by the client consistent with the common fund doc- claims on a pro rata basis equal to their share of the attorney’s party claimants and lienholders routinely reduce their liens or client. However, as beneficiaries of the lawyer’s services, third- ery, must be supported by some additional benefit to the assessed negotiation of medical bills or hospital or subrogation liens, Thus, alawyer charging aclient afee for negotiating re- Furthermore, the Rule 1.5(a) factors require that a fee for the It is neither normal nor customary for lawyers norcustomary to isneithernormal charge It in addition to an attorney’s fee based on gross recov- [RO-2015-01] service. ofthethird-party ficiaries lawyer andclient where boththelawyer andclient are bene- ofthosecosts between the gation, ortheapportionment complex matters, for liensorERISAsubro- example Medicaid fees orexpenses for theoutsourcing oflienresolution in This opiniondoesnotaddress anagreement for orcharge of attorney’s fee isbasedonthegross settlement orrecovery. missible inroutine contingent fee representation where the Commission isoftheopiniontheyare imper-Disciplinary liens orclaimsto besatisfied outofsettlement funds, the ical billsorhospitalsubrogation liensorotherthird-party charge acontingent orcollect fee for ofmed- thereduction missible for anattorney to enter into anagreement for, cessive fee,” whichcould as bedescribed “double-dipping.” enter anagreement for, charge sucha orcollect “clearly ex- fore aviolation ofRule1.5(a),Ala.R.Prof. C.,for alawyer to Rule1.5(a)(4),Ala.R.Prof. See additional service. C. and ethicallyrequired ofthelawyer andnottheresult ofan already istheresultmon funddoctrine, practically ofaction ment claim,orconsistent oftheunderlying withthecom- medical provider orlienholderto facilitate theglobalsettle- 1.5(a)(3), Ala.R.Prof. C. clients anadditionalamount for this “service.” Rule See In sum,whilecircumstancesIn may exist inwhichitisper- And granted alienreduction by a It isthere- It www.alabar.org L 71 T H E Alabama Lawyer 72 T H E Alabama Lawyer January 2016 [email protected] Hughston Nichols have anexcellent group ofofficers and shoes to fill, butwe are to fortunate all grateful big for Heleft hisservice. outstanding jobaspresident and we are mittee and get involved. We want you! or other members of the Executive Com- abar.org section, which can be done at years or less, take a moment and join our censed to practice in Alabama for three as of October 1, 2015, or have been li- state bar. If you were 36 years or younger the YLS is now an opt-in section of the number of events. For the first time ever, quaint you with the YLS and announce a am taking this opportunity to re-ac- bama State Bar Young Lawyers’ Section, I Opt to Join andServe Last year, Brandon Hughey As the 2015-16 president of the Ala- . Then, reach out to the officers www.al- did an E T A D P U S L Y phy, amy nation, nathan ryan, scott montgomery, Hal mooty, Brian mur- Janine mcadory, rachel miller, Wyatt man, Brad Hicks, morgan Hofferber, graham, Harris Hagood, Walton Hick- Latisha davis, nathan dickson, Lisha Comer, Emily Crow, Beau darley, rachel Cash, aaron Chastain, megan Baxter, Chris Burrell, Joel Caldwell, Evan allen, Jesse anderson, Lance (Mobile) the torch. Executive Committee membersto carry The YLS Executive Committee includes: Lee Johnsey, treasurer (Birmingham) Parker miller Charles “Chip” Tait , vice president This year’s officers are: , secretary (Montgomery) reserve your room. call (251) 980-9000 and reference “ASB Young Lawyers’ CLE” to to be at The Caribe on May 19-22. Rooms are filling up fast, so and have a great time at the beach. This year, we are excited state, experience a meaningful CLE targeted at young lawyers areas and locations, interact with judges from around the school friends, network with lawyers of different practice Beach seminar number of attendees. If you’ve never attended the years and our CLE committee has a goal to again double the This past year, attendance was almost doubled from previous annual CLE, the YLS is again hosting our Orange Beach CLE. minute CLE credits and hear from some outstanding speakers. Tuscaloosa and Auburn. It was a great way to get those last- Huntsville, Birmingham, Montgomery, Mobile and, new to 2015, danielle starks. sasser, Julia shreve, robert shreve, miland simpler Building on the success and momentum from last spring’s In November, the YLS hosted our annual Join the        OVErViEW Of THE PrOgram THE Of OVErViEW JOin? WHY participation Professional insurance liability required for tween $1,000and$5,000 percentageMaximum fee of$250onfees be- Annual fee of$100 Referrals inall67counties Improve your bottom line fromBenefit efforts ourmarketing Expand your client base , it is a great opportunity to reunite with law Download the application the Download at or email [email protected]. asB Lawyer referral service sign meup! www.alabar.org iron Bowl CLEs Orange and in contact anycontact ofourexecutive committee membersorme. in the YLS orhelpingoutwithany ofourupcoming events, asbyounglawyers. For more information ongettinginvolved twitter.com/absyounglawyers platforms at https://facebook.com/ABSyounglawyers, https:// by young lawyers andexplore newjobopportunities. more withthestate connected bar, be mentored network, to become to joinoursection schools have theopportunity membership continues to grow. Students at Alabama law fEma assistance Program. vide disaster relief assistance, ifnecessary, through our admission Bar thespring Ceremonyduct , aswell aspro- of thisaward-winning program. Additionally, we willcon- andMobile. ingham, Montgomery We are extremelyproud Conferences Pre-Law ing theminority Be sureBe to keepupwiththe YLS through oursocialmedia YLsOur student division additionto hostingCLEs,In the YLS willcontinue conduct- and/or https://instagram.com/ is initssecond year andour in Huntsville, Birm- www.alabar.org L 73 T H E Alabama Lawyer 74 T H E Alabama Lawyer January 2016 Please email announcements to [email protected]. S M R I F G N O M A , S R E B M E M T U O B A as associates office. inthe Birmingham d. Windsor office asassociates. Phillips riley son Hill, iV; stephen Parsley feltham; Jr.; Jake J. m.gipson; Jack- sippi offices. s.Byrd; rachel J. daniel andJackson,Missis- the Birmingham Hartfield C. meade the Huntsville office asanassociate and announces that Cullen J. Brown ingham office asassociates. and B. madison, michael Chelsea Phillips pher friedman, scott a.gray, s. flachsbart, Christo- Elizabeth bart, that mike Evans, alexander d. flachs- office.the Birmingham anna davis Among Firms Phone (251)301-8500. Canal Rd., Ste. A-6, Orange 36561. Beach opening ofTaupeka Law LLC Members About Carr allison Bradley arant Cummings Boult LLP &BinghamLLP Balch adams &reese mark H. Taupeka michael michael Taunton joinedtheBirm- and KailaB. Wilson joined asanassociate in joined theBirmingham announces that robert announces that joined ascounsel in announces the announces and m. at 25299 joined joined man, iii announces that James Parrish Cole- Jr. nounces that raymond J. Hawthorne, and Arkansas. area counsel for Alabama, Mississippi William C.avant insurance Company Company Commonwealth Land Title insurance Jr. Alabama office and joined asassociates inthecentral Hitson Howard PC an associate. nounces that Johnr.spade ates office. intheBirmingham as anassociate office. intheRoanoke farnsworthH. michael Auburn office. george W. Walker, iii Jr. nounces that Christopher randolph, The finley firm J.P. Coleman Law LLC Cleveland, &atchison riddle Chicago Title insurance Company, Holtsford & Hitson Higgins gilliland Hollis, Wright, Clay & Vail PC Hare, Wynn, newell &newton fuller Hampton LLC is of counsel in the Gulf Coast Office. joined the Montgomery office. joined theMontgomery and Tempe smith and Hannah Torbert Kennedy joined asanassociate. and fidelity national Title announces Bryant that K. joined asassociate announces that andrew W. martin, announce that joined asassoci- joined the announces that joined thefirm in Robertsdale joined as an- an- an- that joined asanassociate. LLC joined asanassociate. announces that Emilyslay Walters steadman sledge LLC associates in the Huntsville office. rogers all in the Birmingham office. Johnny Wilhelm mark Jacob foley, dolan, franz Heatherlee drewriopka, Ward, and counsel maynard Cooper & gale The Law Offices ofrenee W. Lee Huie fernambucq &stewart LLP mcdowell Knight & roedder announces that allyn C.Powell Christie Borton and joined asanassociate. drew Bozeman announces that alex Virginia ash- mcKibbens, joined as associates, rejoined as of announces stephen joined as and sawyer in Fairhope announces that joined asofcounsel. announces that Jeffrey W. smith nicole C.Bohannon office. intheBirmingham joined asapartner announces that steindorff amelia K. miller Tom Willingham office.the Mobile burn-myrick Joseph aguirre The ryals, donaldson&agricola PC Parosen Harwood reynolds, reynolds &LittleLLC Pope mcglamry Phelps dunbar Law Office of david P. shepherd joined theAtlanta office. joined as an associate. joined asassociates in and daniellemash- mary Leah and mary announces that announces that joined thefirm. announces that asheton W. ger Law firm PC. announces anamechangeto The Yea- Potts, ii E. Cooperthat robert joined asanassociate. andBrianrichardson as apartner ham office andthatfinch Lane announces theopeningofaBirming- an associate. nounces that murray s.flint joined thefirm. garrett dennis attorneysjury PC Yeager ofCounsel PC White, arnold &dowd swift, Currie, LLP &Hiers mcghee smith, spires &Peddy PC alexander shunnarah Personal in- joined asshareholders. and Cody isbell announces that and James a. of Fairhope announces an- joined as www.alabar.org joined L 75 T H E Alabama Lawyer 76 T H E Alabama Lawyer L L L L January 2016 Public reprimands suspensions disbarments reinstatement • Birmingham attorney Birmingham Bradley ryan Overton • Decaturattorney danielLee forman • Disbarments Keith attorney Birmingham mauldin Emory • Reinstatement return any ofthecomplainant’s phonecalls. [ASB No. 2014-1110] refund theentire fee. Subsequently, failedto refund thefee Overton andfailed to the $5,000fee that was paid, agreed ofwhichthecomplainant stated to Overton The complainant of later requested arefund portion oftheunearned from Overton rejected Overton’s that hehadhired andinformed Overton. thecourt instructions the complainant regarding to lieto thecourt hisrepresentation. The complainant the complainant’s asked addition,Overton onSeptember20,2013.In indictment that hehadbeensuspended andcontinued to represent thecomplainant through for his IOLTA failingto certify failedto account. inform thecomplainant Overton was suspendedfrom oflaw15,2012, thepractice inAlabamaOverton onOctober ton was hired to represent acomplainant matter. inacriminal thereafter, Shortly (b), 1.16(a)and(d),3.4(c),5.5(a)(1),8.1(b) and8.4(a),(c)(g),Ala.R.Prof. C . Over- was found ofviolating Rules1.4(a)and guilty Overton order Overton. disbarring 2015. enteredThe Board’s supreme court itsorder basedupontheDisciplinary law inAlabama by order ofAlabama, oftheSupremeeffective Court August 19, No. 2015-1032andRule20(a),Pet. No. 2015-685] to aclientcause, andto thepublic. immediate injury [Rule23(a),Pet. andserious andborrowed services meaningful moneyfrom hisclients, thuscausing, orlikelyto mation regarding client funds, fees collected from clients withoutproviding any cause existed that Forman hadmisappropriated client funds, provided falseinfor- 22,2015. April Commission enteredThe Disciplinary anorder findingthat probable andinterimlysummarily suspendedfrom oflaw thepractice inAlabama, effective upon allegations hemisappropriated client funds. Prior to disbarment, Forman was Commission’sDisciplinary order accepting Forman’s consent to disbarmentbased bama, effective 22,2015. April enteredThe supreme court itsorder baseduponthe filed by6,2015.[Rule28,Pet. onApril Mauldin No. 2015-601] Board oftheAlabama State Bargrantingciplinary thepetitionfor reinstatement bama. The supreme court’s order was baseduponthedecisionofPanel IoftheDis- in Alabama, effective September18,2015,by order ofAla- oftheSupreme Court S E C I T O N Y R A N I L P I C S I D was disbarred from oflaw thepractice inAla- was reinstated to oflaw thepractice was disbarred from of thepractice Pinson attorneysandefer Ellis richard • attorney Centerville Thomas Hobson michael • Birmingham attorney • Suspensions from oflaw thepractice inAlabama for 91days by order of public. [Rule20(a),Pet. No. 2015-783] to aclientcause, andto the immediate injury andserious matter andwas causing,a disciplinary orwas likely to failed to respond to arequest for information concerning order findingprobable causeexisted that Hobsonhad tered Commission’s itsorder basedupontheDisciplinary Alabama, effective May 15,2015. en- The supreme court andinterimlymarily suspendedfrom oflaw thepractice in dite litigation. [ASB Nos. 2013-1862 and 2014-795] failed to communicate with his clients and failed to expe- num admitted he failed to diligently represent his clients, ing Rules 1.3, 1.4(a), 3.2, 8.4(a) and 8.4(g), was based upon Brannum’s conditional guilty plea to violat- tion for two years. The order of the Disciplinary Commission dered held in abeyance and Brannum was placed on proba- State Bar, effective August 26, 2015. The suspension was orby order of the Disciplinary Commission of the Alabama pended from the practice of law in Alabama for two years assistance Program You takecare ofyour clients, but alabama Lawyer who takescare ofYOu? rodger Keith Brannum was suspended Ala. R. Prof. C was sus- was sum- . Bran- (334) 224-6920 Lawyer Assistance and Confidential Columbus, Mississippi attorney • Public Reprimands on theAlabama For information Program’s free change for sexual favors. [ASB No. 2015-554] with aclient, where heagreed to waive hislegalfee inex- Sandefer admitted to engaging inasexual relationship of Rules1.8(l)and(m),8.4(d)(g),Ala.R.Prof. C. plea,whereintional guilty Sandefer admitted to violations Commission’sDisciplinary acceptance ofSandefer’s condi- 2015. enteredThe supreme court itsorder baseduponthe ofAlabama,the Supremeeffective Court September4, attempted to refinance their home and were informed that cial liens removed or voided. On August 20, 2013, the clients would not be responsible for filing any motions to have judi- from their home. Garrett’s employment contract stated she in the bankruptcy and believed all liens had been removed for the clients. On April 20, 2011, the clients were discharged ruptcy matter. Garrett filed a Chapter 13 bankruptcy petition 2007, Garrett was retained to represent clients in a bank- and (b) and 8.4(a) and (g), plea, on September 18, 2015, for violating Rules 1.3, 1.4(a) general publication, after submitting a conditional guilty is also licensed in Alabama, received a public reprimand with services, call services, . Ala. R. Prof. C Wesley House garrett . In or around January www.alabar.org , who 77 T H E Alabama Lawyer 78 T H E Alabama Lawyer January 2016 • Birmingham attorney Birmingham steven Paul smith • attorney Mobile Jacqueline macon rachel • (Continued from page77) lic reprimand withgeneral publication onSeptember18, of solicitation letters. [ASB No. 2014-1498] also failedto comply withtimelimitations for thesending with,pleasedisregardin connection thisletter.” Macon statement, you“If have already hired orretained alawyer ter failedto includeasitsfirstsentence thefollowing dissemination asrequired. addition,thesolicitation let- In Counsel oftheAlabama State to Barprior orat thetimeof licitation letter was notsubmitted ofGeneral to theOffice C. Maconsent apotential client asolicitation letter. The so- ber 18,2015for violating Rules7.2(b) and7.3,Ala.R.Prof. public reprimand withoutgeneral publication onSeptem- filed the motions on their behalf. [ASB No. 2014-693] drafts for the clients’ use and that Garrett had not previously completed for two of the lienholder institutions were merely explain to the clients that the motions to avoid lien that she been filed against their home. Garrett failed to adequately their home could not be refinanced because two liens had received apub- received a S E C I T O N Y R A N I L P I C S I D No. 2014-818] thesameday ashisresponseby thecourt to thebar. [ASB that Smithhadfiledamotionto have thecasereinstated case hadbeendismissedwithprejudice, despite thefact Smithdidnotdisclose topleted. the barthat fact, the In would becontacted neededto whendiscovery becom- the barthat thecasewas stillpendingandtheclients municate withtheclients. Smithstated inhisresponse to was stillpending, butSmithfailedto subsequently com- informed theclients onMayretary 21,2014that thecase Smith onmultipleoccasions, withoutsuccess. Smith’s sec- 30,2014. dice onJanuary The clients attempted to contact dismissedthematterthe matter withpreju- andthecourt defendant was nothad. Smithfailedto takeanyin action matter would uponthe bedismissedin30days ifservice fendant, issuinganorder resulting that the inthecourt ofthede- but Smithwas unableto obtainpersonalservice suit ontheirbehalfinChilton County onAugust 16,2013, wife to represent themina caraccident case. Smithfiled and (g),Ala.R.Prof. C.Smithwas hired by aclient andhis 2015 for violating Rules1.3,1.4(a)and(b), 8.1(a)and8.4(a) L Court Reporting· Videography •Videoconferencing• Worldwide Scheduling· Trial Technology• Conference Rooms

Visit Us OnlineAt: www.freedomreporting.com 1 - 8 7 7 - 3 7 3 - 3 6 6 0 toll free Thursday’s Keynote speaker: mike House The national Political Landscape: Views from the House Alabamian W. Michael House, a partner at Hogan Lovells, is recognized as one of the top three legislative lawyers in Washington, DC by Chambers USA and is ranked in the top 10 on Washingtonian magazine’s list of “50 Top Lobbyists.” Mike concentrates on legislative and regulatory matters before the U.S. Congress, White House and various departments and independent agencies of the executive branch.