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Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r .

ALABAMA COURT OF CIVIL
SPECIAL TERM, 2012

APPEALS

2110406

G e r a l d V. S a l t e r v. M i c h a e l F. Moseley Appeal from Montgomery C i r c u i t (CV-10-1360) BRYAN, J u d g e . Gerald V. Salter ("Gerald") appeals from a summary Court

judgment i n f a v o r o f M i c h a e l Sometime b e f o r e business

F. M o s e l e y . We a f f i r m . doing

2003, M. T a y l o r Dawson, J r . , b e g a n

as a s o l e p r o p r i e t o r u n d e r t h e name "Andrew & Dawson,

2110406 a proprietorship" doing business as ("the p r o p r i e t o r s h i p " ) . A f t e r Dawson b e g a n the proprietorship and b e f o r e 2003, a

corporation ("the

was f o r m e d u n d e r t h e name Andrew & Dawson, I n c . t o engage i n t h e c o n s t r u c t i o n business.

corporation"),

Dawson, who owned s h a r e s o f t h e c o r p o r a t i o n , business as t h e p r o p r i e t o r s h i p According to Gerald, after

c o n t i n u e d t o do of the

the formation a

corporation. license

Dawson h e l d

contractor's and t h e on that

issued

i n t h e name o f t h e p r o p r i e t o r s h i p , as a contractor based

corporation

operated

contractor's license. I n addition, the proprietorship p e r f o r m a n c e bonds f o r t h e c o r p o r a t i o n p r o j e c t s because the c o r p o r a t i o n lacked on l a r g e

obtained

construction

s u f f i c i e n t net worth contracted t o perform

t o o b t a i n them. I n 2003, t h e c o r p o r a t i o n two "the

l a r g e c o n s t r u c t i o n p r o j e c t s , w h i c h t h e p a r t i e s r e f e r t o as S t . John's We w i l l Church refer project" t o those and " t h e Auburn Water

project."

two p r o j e c t s

as " t h e two c o u l d n o t have without

p r o j e c t s . " According to Gerald, obtained the contracts

the corporation

to construct

t h e two p r o j e c t s

the c o n t r a c t o r ' s

l i c e n s e i n t h e name o f t h e p r o p r i e t o r s h i p a n d by t h e p r o p r i e t o r s h i p .

p e r f o r m a n c e bonds o b t a i n e d

On J a n u a r y 1, 2004, Dawson a s s i g n e d M o s e l e y , who was an

2

2110406 e m p l o y e e and s h a r e h o l d e r o f t h e c o r p o r a t i o n , t h e a s s e t s Dawson had u s e d i n d o i n g b u s i n e s s as t h e p r o p r i e t o r s h i p and t h e right

t o use t h e p r o p r i e t o r s h i p ' s name. I n A u g u s t 2004, M o s e l e y s o l d his shares of the corporation to Gerald and Brent Salter, owners

G e r a l d ' s s o n . E v e n t u a l l y , G e r a l d and B r e n t became t h e of a l l the shares of the c o r p o r a t i o n .

On November 1, 2004, M o s e l e y s o l d G e r a l d t h e f i x e d a s s e t s and equipment he had used in doing business as the

p r o p r i e t o r s h i p and t h e r i g h t t o use t h e p r o p r i e t o r s h i p ' s name. That sale was memorialized in a written asset-purchase

a g r e e m e n t ("the a s s e t - p u r c h a s e a g r e e m e n t " ) . I n p e r t i n e n t p a r t , the asset-purchase agreement p r o v i d e d :

" T h i s A s s e t P u r c h a s e A g r e e m e n t ( t h e 'Agreement') e n t e r e d i n t o on t h i s t h e 1 s t day o f November, 2004 ( t h e ' E f f e c t i v e D a t e ' ) , by and b e t w e e n M i c h a e l F. Moseley, an individual residing i n Montgomery, Alabama d o i n g business as Andrew & Dawson, a p r o p r i e t o r s h i p ( t h e ' S e l l e r ' ) , and G e r a l d V. S a l t e r , an i n d i v i d u a l r e s i d i n g i n E v e r g r e e n , A l a b a m a ( t h e 'Purchaser').

"A.

Basic Transaction "1. P u r c h a s e and S a l e o f A s s e t s . On and s u b j e c t to the terms and c o n d i t i o n s of this Agreement, P u r c h a s e r agrees t o purchase f r o m S e l l e r , and t h e S e l l e r a g r e e s t o s e l l , transfer, convey and deliver to the
3

2110406 Purchaser the following, which shall h e r e i n a f t e r be r e f e r r e d t o as t h e A s s e t s : "a. A l l f i x e d a s s e t s and e q u i p m e n t o f t h e B u s i n e s s , i n c l u d i n g but not l i m i t e d t o t h e e q u i p m e n t , m a c h i n e r y and v e h i c l e s l i s t e d on E x h i b i t 'A' h e r e t o , a l l i n 'as i s ' c o n d i t i o n . The r i g h t t o use t h e Dawson' or 'Andrew proprietorship.' name 'Andrew & Dawson, & a

"b.

" I t i s u n d e r s t o o d by t h e p a r t i e s t h a t this c o n v e y a n c e does n o t i n c l u d e any a s s e t s o f Andrew & Dawson, I n c . , o r any p e r s o n a l a s s e t s o f M i c h a e l F. Moseley not used i n the B u s i n e s s .
"

"b.

S e l l e r agrees to indemnify Purchaser from and a g a i n s t ... any and a l l l o s s e s , a c t i o n s and c o s t o f d e f e n s e o f a c t i o n s r e s u l t i n g from, arising out of or relating to c o n t r a c t s e n t e r e d i n t o by t h e S e l l e r p r i o r t o the E f f e c t i v e Date."

( C a p i t a l i z a t i o n a l t e r e d ; e m p h a s i s added.) A t some p o i n t , t h e c o s t s o f c o n s t r u c t i n g e a c h o f t h e projects provided it began t o exceed its total contract price. two

Moseley assist funds

approximately

$570,000 t o t h e

corporation to

i n completing

t h e two p r o j e c t s . Dawson a l s o p r o v i d e d for that purpose. Brent,

to the

corporation

I n 2008, Dawson s u e d G e r a l d , other entities i n which Gerald
4

the c o r p o r a t i o n ,

and

and

B r e n t owned an

interest,

2110406 c l a i m i n g t h a t t h e f u n d s he had p r o v i d e d t o t h e c o r p o r a t i o n f o r the completion of and the two p r o j e c t s had been l o a n s not and that loans. various and a the third-

Gerald, Brent, Gerald, Brent,

t h e c o r p o r a t i o n had and the

r e p a i d the asserted Brent, to file

corporation Gerald, for leave

counterclaims corporation

against

Dawson. a motion

also f i l e d

party complaint Gerald, Brent,

a g a i n s t M o s e l e y . On the corporation,

O c t o b e r 8, and

2009, Dawson, signed a

Moseley

s e t t l e m e n t agreement ("the t h i n g s , the s e t t l e m e n t pay to

s e t t l e m e n t a g r e e m e n t " ) . Among o t h e r

agreement p r o v i d e d t h a t M o s e l e y would a note note") payable and a

Dawson $125,000, t h a t G e r a l d w o u l d e x e c u t e Dawson in the amount of $125,000 ("the

mortgage t o secure

t h e payment o f t h e n o t e ( " t h e

mortgage"),

and t h a t any c l a i m s G e r a l d m i g h t have a g a i n s t M o s e l e y b a s e d on the asset-purchase After the his the agreement were excepted was from the

settlement. Dawson

settlement claims

agreement

executed, Brent, owned the an

dismissed and

against

Gerald,

corporation, interest, and

other

entities and the

i n which

they

Gerald,

Brent,

corporation

dismissed 8,

t h e i r counterclaims 2009, and b e f o r e May

a g a i n s t Dawson. Sometime a f t e r O c t o b e r 24, 2010,

Dawson p u b l i s h e d a n o t i c e t h a t

5

2110406 he was On f o r e c l o s i n g the mortgage i n a newspaper. May 24, 2010, Gerald s u e d Dawson and Moseley i n the

Conecuh C i r c u i t C o u r t

s e e k i n g an i n j u n c t i o n e n j o i n i n g Dawson

f r o m f o r e c l o s i n g t h e m o r t g a g e and s e e k i n g an a w a r d o f damages against Moseley. Against Moseley only, Gerald's complaint duty,

s t a t e d c l a i m s of breach of c o n t r a c t , breach of f i d u c i a r y bad faith, suppression, and misrepresentation. Dawson s e t t l e d injunction Court their

Subsequently, and Gerald's The

Gerald for

and an

dispute, was the

claim

against then

Dawson

dismissed.

Conecuh

Circuit

transferred

a c t i o n t o t h e Montgomery C i r c u i t C o u r t ( " t h e On November After 11, the 2010, parties summary to Moseley conducted judgment

t r i a l court"). Gerald's Moseley 6, 2011. on on of

answered discovery, on October

complaint. filed Gerald

a motion filed 1, 14, a

for a

response

the

summary-judgment the trial in

motion court, favor

November November

2011. 2011,

Following entered

a hearing, a summary

judgment

M o s e l e y w i t h o u t s p e c i f y i n g t h e b a s i s f o r t h e summary j u d g m e n t . On December 11, 2011, Gerald filed a postjudgment 2011. On motion, January

which the t r i a l 14, 2012,

c o u r t d e n i e d on December 13,

Gerald t i m e l y appealed

t o t h e supreme c o u r t , w h i c h

6

2110406 t r a n s f e r r e d the appeal to t h i s c o u r t pursuant to

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