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REL:11/10/2011

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SUPREME COURT OF ALABAMA
OCTOBER TERM, 2011-2012 _________________________ 1091111 _________________________ Charles H. Stephens and Stephens Properties, Inc. v. Fines Recycling, Inc., et al. Appeal from Talladega Circuit Court (CV-05-255) SHAW, Justice. Charles H. Stephens and Stephens Properties, Inc., the defendants/counterclaim judgment entered on a plaintiffs jury below, in appeal favor from of a

verdict

Fines

Recycling, Inc. ("Fines"); Harry Donaldson, Jr.; Gerry Hamby;

1091111 Hal Isbell; and Donald G. Wilson (collectively "the Fines shareholders"), the plaintiffs/counterclaim defendants below, on claims stemming from a dispute over a commercial lease.

We

dismiss the appeal as being from a nonfinal judgment. Facts and Procedural History
Stephens Properties, Inc., is an Alabama corporation that leased commercial rental property in Talladega; Charles H. Stephens is the president of Stephens Properties. times pertinent to this dispute, Fines, also an At all Alabama

corporation, was involved in the business of salvaging scrap metal from the automobile-shredding process. In May 1996, Stephens Properties and Fines, Inc., Fines's predecessor in interest, entered into a lease agreement pursuant to which Fines, Inc., leased approximately six acres of real property in Talladega for use in its metal-reclamation business. With regard to that lease agreement and the resulting business relations of the parties, and as reflected in the record, "the following facts [were] established by admission in the pleadings or by stipulation of counsel": "e. On or about the 10th day of May, 1996, Fines[, Inc.,] and Stephens Properties executed a lease of certain lands located in Talladega County, Alabama. ... 2

1091111 "f. Fines[, Inc.,] operated a recycling business on property belonging to Stephens Properties[;] Fines[, Inc.,] ordered truckloads of auto dirt and auto fluff (material from auto shredders) sent to it for a screening process to screen out metals which could be sold to foundries and other businesses. The material remaining after reclamation was a byproduct of this business. Fines[, Inc.,] developed this soil-product for use as landfill cover. "g. Fines[, Inc.,] attempted to have this byproduct classified by the Alabama Department of Environmental Management, hereinafter referred to as 'ADEM,' as 'fill' or 'cover' rather than waste. ADEM originally accepted the classification with certain conditions, but in 1998 changed [its] position and stated that the auto dirt and byproduct was waste which must be removed and disposed of in a landfill. "h. Fines[, Inc.,] applied for and received a landfill permit from ADEM to construct a landfill nearby on other property owned by Stephens Properties. The initial permit was to allow Fines[, Inc.,] to construct a landfill to dump the waste from its metal reclaiming business. ... Fines[, Inc.,] did not construct the landfill. "i. In 1999, Fines[, Inc.,] entered into a transaction with a company named WCA of Alabama, LLC, hereinafter referred to as 'WCA of Alabama,' whereby Fines[, Inc.,] would sell it's [sic] landfill permit to WCA of Alabama so that WCA of Alabama could construct and operate a landfill. This transaction was effectuated by selling the stock of Fines[, Inc.,] to WCA of Alabama, then transferring all assets, rights and obligations of Fines, [Inc.,] except for the permit, to another company named Fines Recycling, Inc, hereinafter referred to as 'Fines Recycling.' ... "j. On or about the 30th day of June, 1999 the assets of Fines[, Inc.,] were transferred to Fines 3

1091111 Recycling, including the lease agreement between Fines[, Inc.,] and Stephens Properties. Fines Recycling continued to operate its recycling operation on, and otherwise used and occupied, property belonging to Stephens Properties. "k. As part of the sale to WCA of Alabama, the [Fines shareholders], Donaldson, Hamby, Isbell and Wilson, each received shares of stock in Waste Corporation of America, Inc., hereinafter referred to as 'WCA of America.' WCA of America went public in June, 2004 and new stock certificates were issued by WCA of America. "l. In March of 1999 ADEM sent a notice of violation alleging that Fines Recycling had an unauthorized solid waste dump on the property and demanded that it cease the unauthorized disposal and move the waste to a permitted solid waste disposal facility.[ 1 ] ".... "p. Isbell pledged his individually owned WCA of America stock to Stephens Properties as security for the obligation of Fines Recycling to clean up the property and for rent until current. "q. Hamby, Donaldson[,] and Wilson pledged their individually owned WCA of America stock to Stephens Properties as security for the clean up of the property but deny that they pledged their stock for rent owed by Fines Recycling to Stephens Properties. "r. Hamby, Wilson[,] and Donaldson delivered possession of their WCA of America stock certificates to [Charles] Stephens and Stephens Properties. This violation occurred on the property where the recycling plant was located, not at the site of the proposed landfill. 4
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1091111 "s. Because Isbell had lost his WCA of America stock certificate, Isbell executed a written agreement with Stephens Properties pledging 12,823 shares of stock as security for clean up and rent until current. "t. In September or October, 2001, Fines Recycling moved its operations to Birmingham. At that time, auto fluff and material resulting from the operations of Fines Recycling was left on the property owned by Stephens Properties. "u. In 2002 Fines Recycling permanently went out of business. "v. The property owned by Stephens Properties was ultimately cleaned up and the fluff and material resulting from the operations of Fines Recycling was removed from the property." Following completion of the environmental cleanup, however, Stephens Properties and/or Stephens allegedly failed to return the stock certificates pledged as security by the Fines

shareholders. Fines and the Fines shareholders subsequently filed the underlying action against Stephens Properties and Stephens, which, following several amendments, ultimately sought

compensatory and punitive damages related to claims of breach of contract, fraudulent misrepresentation, conversion of the pledged stock certificates, and conversion of a 1990 Case brand loading tractor ("the Case loader"). Stephens

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1091111 Properties and Stephens answered, and Stephens Properties

filed several counterclaims. Stephens Properties'

Following several amendments, ultimately sought the

counterclaims

following relief: a declaratory judgment as to the rights, liabilities, and obligations of the parties with respect to the lease of the property, the cleanup process necessitated by environmental violations on the property as identified by the Alabama Department of Environmental Management ("ADEM"), and the pledged stock certificates; judicial foreclosure of the pledged stock certificates; and money damages associated with Fines's purported breach of the lease agreement by allegedly failing to pay rent after February 2000 and for damage to the rental premises. Stephens Properties also alleged

misrepresentation and sought to pierce the corporate veil and to impose personal liability on the Fines shareholders for any judgment entered against Fines. The case proceeded to a jury trial on the following six claims: Fines and the Fines shareholders' claim that Stephens Properties and/or Stephens converted the Case loader; the Fines shareholders' claim that Stephens Properties and/or

Stephens converted the stock certificates of Donaldson, Hamby,

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1091111 and Wilson; the Fines shareholders' breach-of-contract action based on Stephens Properties' and/or Stephens's alleged

failure to return the pledged stock certificates as agreed by the parties; Stephens Properties' counterclaim seeking pastdue rent; Stephens Properties' counterclaim seeking damages for the cost of repairs for damage under the lease; and for

Stephens

Properties'

counterclaim

seeking

damages

additional costs and damage to the leased premises. 2 The jury found as follows:

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