Hand Arendall, LLC v. Joiner

Filing 67

MEMORANDUM AND OPINION AND ORDER. The Court finds in favor of Hand Arendall on Count One of its complaint for breach of contract. The Court is unable to determine the total fees. Hand Arendall has until 9/7/12 to amend their request for damages, with explanation, to conform to the Court's factual findings. Signed by Judge Kristi K. DuBose on 8/31/2012. (cmj)

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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION HAND ARENDALL, LLC, Plaintiff, v. MURRAY E. JOINER, JR., M.D., Defendant. ) ) ) ) ) ) ) ) ) CIVIL ACTION NO. 11-0150-KD-C MEMORANDUM OPINION AND ORDER This action came before the Court for a non-jury trial held July 16 and 17, 2012. Upon consideration of the testimony and exhibits presented at trial, post-trial briefs, and all other relevant portions of the record, the Court makes the following findings of fact and conclusions of law1: I. Procedural Background On February 28, 2011, Plaintiff Hand Arendall, LLC (“Hand Arendall”) initiated this fee dispute action against Defendant Dr. Murray E. Joiner, Jr. (“Dr. Joiner”) in the Circuit Court of Mobile County, Alabama (CV-2011-900465.00) for payment of $113,501.63 for legal services it allegedly performed for him throughout 2009 with regard to an attempted acquisition of Our Southern Home (an assisted living facility located in Mobile, Alabama). Dr. Joiner removed the action to this Court. After discovery concluded, Dr. Joiner filed a motion for summary judgment, which was denied. 1 Pursuant to Rule 52(a) of the Federal Rules of Civil Procedure, “[i]n an action tried on the facts without a jury or with an advisory jury, the court must find the facts specially and state its conclusions of law separately. The findings and conclusions may be stated on the record after the close of the evidence or may appear in an opinion or a memorandum of decision filed by the court. Judgment must be entered under Rule 58.” Fed. R. Civ. P. 52(a). The non-jury trial was held on July 16 and 17, 2012. Before trial began, Hand Arendall clarified that its claim against Dr. Joiner was for breach of contract and not pursuant to the equitable theory of quantum meruit. II. Findings of Fact2   At  some  time  in  2008,  Dr.  Murray  Joiner  met  Terry  Hester,  an  Alabama  businessman   who  arranged  financing  for  the  purchase  of  investment  properties.    Hester  and  Dr.  Joiner   discussed  investing  in  nursing  homes  and  assisted  living  facilities  in  the  southeast.    Hester   told  Dr.  Joiner  about  Our  Southern  Home,  Inc.,  an  Alabama  corporation  that  owned  an   assisted  living  facility  in  Mobile,  Alabama.    The  owner  and  sole  shareholder  of  the   corporation,  Lynn  Weiss,  had  filed  personal  bankruptcy  and  the  assets  were  being  sold   through  the  bankruptcy  proceedings.    Hester  and  Dr.  Joiner  discussed  purchasing  this   facility  as  the  first  one  in  their  investment  plan.    (Joiner  trial  testimony,  Joiner  deposition,   doc.  44-­‐1,  p.  8-­‐18).    They  agreed  that  Hester  would  assist  in  obtaining  financing  and  Dr.   Joiner  would  form  Our  Southern  Home,  LLC,  to  purchase  the  assets  of  Our  Southern  Home,   Inc.    It  was  also  agreed  that  after  closing  the  purchase,  Dr.  Joiner  would  transfer  40%   ownership  to  Hester  and  they  would  be  partners  in  the  venture.    (Hand  Arendall  Exhibit    7,   Agreement;    Exhibit  10,  Letter  of  Intent  to  purchase).      Thereafter,  Dr.  Joiner  decided   against  forming  Our  Southern  Home,  LLC,  to  purchase  the  assets  of  Our  Southern  Home,   Inc.    Instead  he  decided  to  use  Spreading  Oak  Development  III,  LLC,  (“Spreading  Oak”)  an   existing  limited  liability  company  organized  under  the  laws  of  Virginia,  as  the  acquisition   2 Unless stated otherwise, the findings of fact are taken from the testimony at trial, the post-trial briefs, and the documentary evidence submitted at trial. 2 entity.      Spreading  Oak  was  an  entity  without  any  assets.    (Leatherbury  trial  testimony;   Marshal  deposition/trial  testimony).         Dr.  Joiner  was  represented  by  his  long-­‐standing  attorney  Heman  Marshall,  a  partner   at  the  Virginia  law  firm  of  Woods  Rogers,  PLC.      Dr.  Joiner  hired  Marshall  to  assist  him  with   the  acquisition  of  the  facility.      Nicole  Ingle  and  Nick  Conte,  attorneys  with  Woods  Rogers,   also  worked  on  the  acquisition  with  Marshall.         In  late  December  2008,  Hester  and  Xan  Carvan,  another  person  involved  in  the   investment,  contacted  Gregory  L.  Leatherbury  an  attorney  with  Hand  Arendall  and  told   Leatherbury  that  Dr.  Joiner  and  Hester  intended  to  buy  multiple  nursing  home  facilities   starting  with  Our  Southern  Home,  Inc.    Hester  engaged  Hand  Arendall  to  perform   transactional  work  for  the  purchase.    Leatherbury  confirmed  this  relationship  in  an  email   to  Hester  dated  December  29,  2008    (“This  will  confirm  that  you  have  retained  my  firm  on   behalf  of  Regency  Worldwide  Development,  Inc.,  a  Delaware  crop.  (Regency)  in  connection   with  the  proposed  acquisition  of  the  assets  of  Our  Southern  Home,  Inc.,  and  Lynn  Weiss.”)     (Hand  Arendall  Exhibit  1).    When  Hand  Arendall  opened  the  client  account  –  Terry  Hester   was  named  as  the  client  and  the  “contact  name”  was  “Regency  Worldwide  Partners”.    (Hand   Arendall  Exhibit  2).     In  the  morning  of  January  8,  2009,  at  10:10  a.m.,  Hester  emailed  Dr.  Joiner  to   provide  the  name  and  address  for  Leatherbury  at  Hand  Arendall.    Hester  explained  that   Leatherbury  was  the  attorney  “we  are  using  for  contract  and  as  closing  attorney”.      (Hand   Arendall  Exhibit  3).         Dr.  Joiner  forwarded  the  email  to  Marshall  at  10:40  a.m.,  stating     Please  contact  the  attorney  to  make  sure  he  knows  your  are  (sic)  in  charge   even  though  he  is  helping  us  with  my  Alabama  projects.    I  want  to  make  sure   3 he  knows  he  works  for  me.    Also,  he  is  preparing  an  agreement  between   Hester  and  myself.    Once  we  close  we  will  become  partners  in  these  ventures.     .  .  .       (Hand  Arendall  Exhibit  3).     Marshall  responded  at  11:11  a.m.  and  explained  that  Hand  Arendall  was  the  firm  he   recommended3  and  asked  whether  Hester  or  Joiner  had  spoken  with  Leatherbury.     Marshall  wrote:    “If  so,  I  will  call  him  immediately  and  we  will  proceed.”    (Id.)    Dr.  Joiner   responded  at  12:06  p.m.,     (Id.)     [Hester]  did  speak  with  him.    We  will  make  this  a  one  time  task  situation.    Of     (sic)  you  check  him  out  and  he  meets  your  standards  and  you  like  him  we  can   make  this  a  long  term  relationship.    It  will  be  your  call.  .  .  .       Later  that  day,  Marshall  called  Leatherbury  to  discuss  the  rates  to  charge  Dr.  Joiner   (Leatherbury  trial  testimony).      Then  at  5:38  p.m.  that  afternoon,  Marshall  confirmed  that   conversation  in  an  email  to  Dr.  Joiner,  explaining  that     I  spoke  with  Greg  Leatherbury  this  afternoon.    Apparently  Terry  has  been   speaking  with  him  extensively  over  the  last  few  days.    He  advised  that  he   was  unsure  exactly  who  his  client  was,  but  that  he  had  sent  Terry  a   representation  letter  covering  Terry  personally.    That  has  not  yet  been   returned  to  him.    However,  he  is  agreeable  to  handling  it  however  you  and   Terry  agree.    I  had  initially  understood  that  he  would  be  working  for  you,   under  our  supervision,  so  this  is  an  issue  we  will  want  to  sort  out  quickly.  .  .  .     He  indicated  that  Terry  had  asked  him  to  also  draft  an  agreement  between   you  and  Terry  regarding  the  shared  investment.    In  his  words,  you  would  be   “50/50  owners  and  co-­‐managers  with  equal  powers.”    I  advised  that  my   understanding  was  60/40  your  way.      This  of  course  highlights  the  fact  that   there  could  be  some  issue  to  be  worked  out  between  you  and  Terry  before   going  on  with  the  main  agreements  on  the  purchase.    Perhaps  Greg  can  act   3 Marshall testified that he had found Hand Arendall in Martindale-Hubbell and left a message with the Birmingham Office. Coincidentally, Hester had contacted Leatherbury at the Mobile Office. (Marshall deposition, p. 40-41) 4 as  Terry’s  counsel  on  the  first  step  and  we  can  represent  your  interests.     Once  you  and  Terry  have  your  deal  drawn.    Greg  would  then  act  as  local   counsel  for  the  purchasing  entity  which  would  then  be  owned  by  you  and   Terry.    We  can  continue  to  work  with  Greg  and  his  firm  in  a  joint  effort.       (Joiner’s    Exhibit  57).     Based  on  Leatherbury’s  understanding  that  he  represented  Hester,  Leatherbury  and   Robert  Riccio,  another  Hand  Arendall  attorney,  began  to  prepare  documents  relative  to  the   purchase  of  the  facility  including  a  Letter  of  Intent.    (Leatherbury  trial  testimony;  Joiner   Exhibit  66,  email  dated  January  10,  2009,  from  Leatherbury  to  Marshall).    However,  on  or   near  January  14,  2009,  during  a  conference  call  with  Marshall  and  Ingle  of  Woods  Rogers   and  Hand  Arendall  attorneys  Leatherbury,  Chris  Gill  and  Riccio  regarding  the  documents   prepared  by  Riccio,  the  subject  arose  of  preparing  a  new  limited  liability  company  and   operating  agreement.    (Id.)4    Leatherbury  perceived  the  course  of  this  conversation  to   indicate  that  Marshall  and  Ingle  “were  looking  to  [Hand  Arendall]  to  represent  Dr.  Joiner”.     (Id.)      Leatherbury  then  told  Marshall  and  the  other  attorneys  that  he  had  to  have   clarification  regarding  whom  he  was  representing  in  this  transaction  and  asked  whether  he   represented  Dr.  Joiner  or  Hester.    Leatherbury  testified,  “they  said  you  are  representing  Dr.   Joiner.”  (Id.)       4 Dr. Joiner asserts that only Riccio and Gill participated in the conference call and that Leatherbury spoke to Marshall later by telephone. (Doc 66, Joiner’s post-trial brief). Regardless of whether Leatherbury sought clarification as to the identity of his client at the conference call or later in a separate conference with Marshall, Leatherbury’s testimony that he left the conversation with the belief that Dr. Joiner individually was his client is credible. This is particularly true in light of the fact that it is highly unlikely that the firm would agree to represent, without a retainer, an asset-free entity without some assurance of payment from another source. 5 On  January  14,  2009,  Leatherbury  called  Marshall  to  discuss  the  fee  to  charge  Dr.   Joiner,  explaining  that  he  did  not  want  to  charge  more  than  Marshall.  (Id.)      Also,  that  day,  at   5:59  p.m.,  Marshal  emailed  Conte  and  Ingle  to  explain  that  he  had  spoken  with  Leatherbury   and  that  “[h]e  spoke  with  Terry  Hester  who  is  fine  with  his  firm  representing  the  acquiring   entity.    Leatherbury  is  preparing  an  engagement  agreement  addressed  to  both  Murray  and   Terry  setting  this  out.”  (Joiner’s    Exhibit  58).       Marshall  also  emailed  Dr.  Joiner,  at  6:07  p.m.  on  January  14,  2009,  as  follows:     I  really  need  about  30  to  45  minutes  with  you  on  the  phone  to  sort  out  all  the   issues  in  the  Southern  Home  arrangement.    I  spoke  today  with  Greg   Leatherbury,  the  partner  on  the  file  at  Hand,  Arendall  in  Mobile  and  I  have   gotten  his  representation  straightened  out.    We  also  had  a  conference  call   with  the  other  lawyers  at  Hand  Arendall  who  are  preparing  documents.     However,  I  want  to  go  over  all  of  the  details  of  how  you  see  this  unfolding,    .  .  .       (Hand  Arendall  Exhibit  11).       Marshall  stated  that  he  understood  that  “Hand  Arendall  was  representing  Terry   Hester’s  interests  and  that  we  were  jointly  cooperating  on  the  representation  of  the   acquisition  entity”  which  was  Spreading  Oak.  (Marshall  trial  testimony  by  deposition,   Marshall  deposition  p.  47).      Marshall  stated  that  Hand  Arendall  represented  the  interest  of   Dr.  Joiner  “[i]ndirectly  though  the  -­‐  -­‐  through  our  joint  efforts  for  the  acquisition  entity”  but   not  personally.    (Marshall  trial  testimony,  Marshall  deposition  p.  54).         From  January  14,  2009  until  the  purchase  fell  through  in  September  2009,5  Hand   Arendall  continued  to  perform  work  on  the  acquisition  with  consultation  and   communication  between  Leatherbury,  Riccio  and  Gill  and  Marshall,  Ingle  and  Conte.     5 Ultimately, Dr. Joiner and Marshall as well as Leatherbury and Riccio, determined that the facility could not generate the cash flow anticipated and the purchase was never completed. (Leatherbury, Riccio, Joiner, Marshall trial testimony). 6 Leatherbury  and  Riccio  also  communicated  directly  with  Joiner  during  this  time  period.     Numerous  documents  and  emails  were  generated  and  many  identified  Dr.  Joiner   individually  as  Hand  Arendall’s  client  without  identifying  him  as  the  member  or  manager  of   Spreading  Oak.         Specifically,  in  February  2009,  when  disclosing  certain  conflicts  of  interest  related  to   Hand  Arendall’s  representation  of  two  banks  which  held  loans  secured  by  assets  of  Weiss   and  Our  Southern  Home,  Inc.  and  were  creditors  in  Weiss’  personal  bankruptcy,  the  conflict   of  interest  waivers  sent  to  Dr.  Joiner  by  way  of  Marshall  and  Leatherbury  identified  Dr.   Joiner  in  his  individual  capacity  without  designation  as  Spreading  Oak’s  manager  or   member  (Hand  Arendall  Exhibit  15).      Marshall  discussed  these  conflict  of  interest  waivers   with  Dr.  Joiner.    (Marshal  deposition  p.  82).        The  conflict  of  interest  waivers  were  never   signed  or  returned  to  Hand  Arendall.            Also,  Leatherbury  emailed  Dr.  Joiner  in  May  2009  to  confirm  their  conversation  of   that  date.  (Hand  Arendall  Exhibit  55).      Therein,  after  addressing  the  status  of  the  potential   “bid  off”  to  purchase  the  assets  of  the  facility  in  the  bankruptcy  court,  Leatherbury   concluded  with  “We  are  all  trying  to  protect  your  interest  and  make  sure  that  you  do  buy   this  facility  .  .  .  and  do  everything  in  our  power  to  be  sure  you  buy  this  facility  on   commercially  reasonable  terms  .  .  .  Our  goal  is  to  get  this  deal  done,  period.”    (Id.)       Moreover,  emails  from  May  to  September  2009,  on  which  Dr.  Joiner  was  copied  or   addressed,  indicated  that  Hand  Arendall  believed  their  client  to  be  Dr.  Joiner.      A  May  2009   email  addressed  to  Travis  Bedsole,  Bankruptcy  Court  Administrator,  clearly  stated,  “[w]e   represent  Spreading  Oak  Development  III,  LLC  (and  Dr.  Joiner,  one  of  its  principal[sic])  (Pl.   Exh.  52).    Another  May  2009  email  to  Dr.  Joiner  stated,  “I  don’t  disagree  at  all  with  your   7 thoughts,  and  you  are  the  client.”    (Pl.  Exh.  58).    In  a  September  2009  email  to  attorney   Jeffrey  Hartley,  Hand  Arendall  again  stated  that  they  represented  Dr.  Joiner.         In  late  July  2009,  Hand  Arendall  first  invoiced  Dr.  Joiner  individually,  in  the  amount   of  $91,610.37.      In  early  August  2009,  Dr.  Joiner  met  with  Hand  Arendall  attorney  Robert   Riccio  to  discuss  the  financial  status  of  the  facility.    They  met  with  the  accountant  for  the   corporation  and  the  manager  of  the  facility.    At  this  meeting,  Dr.  Joiner  and  Riccio  learned   that  the  financial  status  of  the  facility  likely  would  not  generate  the  cash  flow  necessary  to   make  this  investment  profitable.    In  a  private  meeting  that  same  day,  Riccio  advised  Dr.   Joiner  as  to  the  viability  of  the  facility  and  whether  Dr.  Joiner  should  move  forward  with  the   purchase.      Dr.  Joiner  expressed  concern  over  the  amount  of  money  invested  to  date,   including  attorney’s  fees  due  to  Hand  Arendall  and  Woods  Rogers.    Dr.  Joiner  told  Riccio   that  he  would  pay  Hand  Arendall’s  attorneys  fees  as  well  as  the  fees  of  Woods  Rogers.   (Riccio  trial  testimony).    The  amount  due  increased  to  $104,547.95  by  late  August  and   increased  to  $116,783.63  by  late  September  2009.           In  early  October  2009,  Weiss’s  attorney  contacted  Leatherbury  about  refunding  Dr.   Joiner’s  $5,000  earnest  money  deposit  held  in  trust.    At  Dr.  Joiner’s  direction,  the  attorney   issued  a  check  payable  to  Leatherbury  which  he  then  endorsed  payable  to  Hand  Arendall.       The  money  was  credited  to  Dr.  Joiner’s  account.  (Hand  Arendall  Exhibit  22,  Leatherbury   trial  testimony).    Leatherbury  wrote  a  note  to  Dr.  Joiner:   10-­‐5-­‐09     Murray,     Per  our  discussions  and  as  stated  above  by  Rick,  we  are  applying  the   attached  check  as  a  payment  on  your  account.       Greg     8 (Hand  Arendall  Exhibit  22).         Numerous  emails  among  Dr.  Joiner,  Leatherbury  and  Marshal  were  sent  during  the   next  few  months.    The  emails  addressed  Weiss’  bankruptcy  proceedings  and  the  facility’s   sale  in  bankruptcy  at  a  substantially  lower  price  than  originally  offered  by  Dr.  Joiner  as  well   as  payment  of  fees  incurred  by  both  Marshall  and  Leatherbury.      Hand  Arendall  sent   another  invoice  in  December  2009.      In  October  2010,  the  last  invoice  before  the  complaint   was  filed  showed  a  balance  due  of    $113,501.63.     III.   Conclusions  of  Law       A.    Venue,  Jurisdiction  and  Choice  of  Law     This  Court  has  personal  jurisdiction  over  the  parties  and  the  Southern  District  of   Alabama  is  a  proper  venue.      This  action  was  removed  on  basis  of  diversity  jurisdiction   pursuant  to  28  U.S.C.  §1332(a)(1)  (doc.  1).    “[A]  federal  court  in  a  diversity  case  is  required   to  apply  the  laws,  including  principles  of  conflict  of  laws,  of  the  state  in  which  the  federal   court  sits.”    Manuel  v.  Convergys  Corp.,  430  F.3d  1132,  1139  (11th  Cir.  2005)  (citing  Klaxon   Co.  v.  Stentor  Elec.  Mfg.  Co.,  313  U.S.  487,  496  (1941)).    Therefore,  the  Court  must  decide   which  state’s  law  governs  this  action  between  Hand  Arendall,  a  citizen  of  Alabama  and   Joiner,  a  citizen  of  Virginia.         “Alabama  law  follows  the  traditional  conflict-­‐of-­‐law  principles  of  lex  loci  contractus   and  lex  loci  delicti.”    Lifestar  Response  of  Ala.,  Inc.  v.  Admiral  Ins.  Co.,  17  So.  3d  200  (Ala.   2009).    Thus,  contract  claims  are  governed  by  the  laws  of  the  state  where  the  contract  was   made,  unless  the  contracting  “parties  have  legally  contracted  with  reference  to  the  laws  of   another  jurisdiction”.  Cherry,  Bekaert  &  Holland  v.  Brown,  582  So.  2d  502,  506  (Ala.  1991);   Kruger  Commodities,  Inc.  v.  U.S.  Fid.  and  Guar.,  923  F.Supp.  1474,  1477  (M.D.Ala.1996)  (“The   9 general  choice-­‐of-­‐law  rule  in  Alabama  is  lex  loci  contractus,  which  provides  that  ‘a  contract   is  governed  as  to  its  nature,  obligation,  and  validity  by  the  law  of  the  place  where  it  was   made.’”)  (citation  omitted).  This  breach  of  contract  action  is  governed  by  the  laws  of  the   State  of  Alabama  because  the  parties  have  not  contracted  otherwise.         B.  Evidentiary  Rulings     At  trial,  the  Court  took  under  submission  the  admissibility  of  Hand  Arendall’s   Exhibits  19  and  21.  Exhibit  19  is  an  email  dated  September  21,  2009,  from  Dr.  Joiner  to   Marshall  with  an  email  from  Leatherbury  attached.    In  the  attachment  Leatherbury  asks  Dr.   Joiner  for  permission  to  have  Weiss’  bankruptcy  attorney  transfer  the  deposit  to  Hand   Arendall  to  apply  as  a  payment  on  the  balance  due.    Dr.  Joiner  asks  Marshall  for  advice  on   how  to  word  his  response  to  Leatherbury.      Exhibit  21  is  an  email  dated  September  28,   2009,  from  Dr.  Joiner  to  Marshall  wherein  Dr.  Joiner  offers  a  solution  to  payment  of  the   amount  owed  to  Woods  Rogers,  discusses  payment  of  Hand  Arendall’s  fees,  states  his   displeasure  with  certain  aspects  of  its  representation,  and  expresses  his  opinion  that   Hester  should  also  be  responsible  for  payment  of  attorney’s  fees  and  costs  incurred  in  their   failed  business  venture.       Hand  Arendall  sought  admission  of  these  exhibits  as  evidence  of  mutual  assent  to   the  formation  of  a  contract  between  Hand  Arendall  and  Dr.  Joiner  individually.    Specifically,   it  points  to  Dr.  Joiner’s  statement:  “I  want  to  make  everyone  whole”  and  Dr.  Joiner’s   statement:    “I  will  get  everyone  taken  care  of.”    Hand  Arendall  argued  that  the  emails  at   issue  do  not  involve  legal  advice  since  there  was  no  litigation  at  that  time  and  other  similar   emails  have  been  found  not  to  be  subject  to  the  attorney-­‐client  privilege.     Rule  501  of  the  Federal  Rules  of  Evidence  addresses  privilege  in  general  and  states,   10 in  relevant  part,  that  “in  a  civil  case,  state  law  governs  privilege  regarding  a  claim  or   defense  for  which  state  law  supplies  the  rule  of  decision.”6      In  this  diversity  action,  the  law   of  the  State  of  Alabama  supplies  the  rule  of  decision.    In  that  regard,  Rule  502  of  the   Alabama  Rules  of  Evidence  governs  the  attorney-­‐client  privilege  in  Alabama.    The  Rule   states  in  pertinent  part  as  follows:   (b)  General  Rule  of  Privilege.  A  client  has  a  privilege  to  refuse  to  disclose  and  to   prevent  any  other  person  from  disclosing  a  confidential  communication  made  for   the  purpose  of  facilitating  the  rendition  of  professional  legal  services  to  the  client,   (1)  between  the  client  or  a  representative  of  the  client  and  the  client's  attorney  or  a   representative  of  the  attorney,  or  (2)  between  the  attorney  and  a  representative  of   the  attorney,  (3)  by  the  client  or  a  representative  of  the  client  or  the  client's  attorney   or  a  representative  of  the  attorney  to  an  attorney  or  a  representative  of  an  attorney   representing  another  party  concerning  a  matter  of  common  interest,  (4)  between   representatives  of  the  client  and  between  the  client  and  a  representative  of  the   client  resulting  from  the  specific  request  of,  or  at  the  express  direction  of,  an   attorney,  or  (5)  among  attorneys  and  their  representatives  representing  the  same   client.     Ala.  R.  Evid.  502(b).         Under  Alabama  law,  the  existence  of  a  privileged  communication  “is  a  question  of   fact  to  be  determined  by  the  trial  court  from  the  evidence  presented.”    Exxon  Corporation  v.   Department  of  Conservation  and  Natural  Resources,  859  So.  2d  1096,  1103(Ala.  2003)   (citation  omitted).      Dr.  Joiner,  as  the  “party  asserting  the  attorney-­‐client  privilege  bears  the   burden  of  establishing  that  the  privilege  attaches  to  the  documents  requested.”  Ex  parte   6 The email communications appear to have been sent between Dr. Joiner and Marshall in Virginia. However, as Rule 501 explains Alabama law supplies the rule of decision and therefore, also governs privilege. Dr. Joiner raised his objection under Alabama law. (doc. 55, joint pretrial document, p. 12). In opposing the objection, Hand Arendall argued pursuant to Alabama law. (doc. 65, post-trial brief). However, the same result would obtain under Virginia law. SNC-Lavalin America, Inc. v. Alliant Techsystems, Inc.. 2011 WL 4716225, 1 (W.D.Va. Oct. 6, 2011) (“Accordingly, ‘[t]he attorney-client privilege does not attach to a document merely because a client delivers it to his attorney.’ . . . Instead, the communication must be for the purpose of procuring or providing legal advice.”) (citation omitted). 11 Tucker,  66  So.3d  750,  753  (Ala.  2011)  (citation  omitted).    “The  general  rule  is  that  an   attorney  cannot  disclose  the  advice  he  gave  to  his  client  about  matters  concerning  which  he   was  consulted  professionally,  nor  can  the  client  be  required  to  divulge  the  advice  that  his   attorney  gave  him.”    Ex  parte  Meadowbrook  Ins.  Group,  Inc.,  987  So.2d  540,  550  (Ala.  2007)   (citation  omitted).    However,  “[t]he  attorney-­‐client  privilege  generally  does  not  exempt  the   attorney  from  testifying  to  the  fact  of  the  attorney's  employment,  the  name  of  the  person  so   employing  and  the  terms  of  the  employment.  This  general  rule  includes  disclosure  of  the   fee  arrangement.”  Ex  parte  Tucker,  66  So.3d  at  753  (quoting  2  Charles  W.  Gamble,  McElroy's   Alabama  Evidence  §  392.02  (6th  ed.  2009))  (footnotes  omitted).    Also,  “information   regarding  a  fee  arrangement  and  the  identity  of  the  person  paying  the  fee  falls  outside  the   protection  of  the  attorney-­‐client  privilege.”  Id.,  (quoting  In  re  Grand  Jury  Proceedings  in  re   Freeman,  708  F.2d  1571,  1575  (11th  Cir.1983))     The  burden  is  on  Dr.  Joiner  to  establish  that  the  information  contained  in  the  emails   constituted  legal  advice  from  his  attorney  Marshall  instead  of  a  disclosure  of  the  fee   arrangement  with  Marshall  or  Hand  Arendall.    At  trial,  Dr.  Joiner  argued  that  the  attorney-­‐ client  privilege  applied  to  these  exhibits  because  he  was  seeking  legal  advice  from  Marshall   as  to  how  to  handle  the  dispute  about  attorney’s  fees  after  the  transaction  failed;  he  was   not  seeking  legal  advice  pertaining  to  the  acquisition  of  the  facility  (the  subject  of  joint   representation).         The  Court  finds  that  Dr.  Joiner  has  met  his  burden  to  establish  that  these  emails  are   subject  to  the  attorney-­‐client  privilege.  Specifically,  the  Court  finds  that  the  emails  address   different  legal  issues  than  the  purchase  of  the  facility  and  the  joint  representation.    Dr.   Joiner  seeks  advice  from  Marshall  regarding  the  debt  owed  to  Hand  Arendall.    Therefore,   12 the  objection  is  sustained.         C.  Alabama  Law  on  Contracts     “The  “elements  of  a  breach-­‐of-­‐contract  claim  under  Alabama  law  are  (1)  a  valid   contract  binding  the  parties;  (2)  the  plaintiffs'  performance  under  the  contract;  (3)  the   defendant's  nonperformance;  and  (4)  resulting  damages.”    Allen  v.  Baker,  -­‐  -­‐  -­‐  So.  3d  -­‐  -­‐  -­‐  ,     2012  WL  2161629,  5  (Ala.  Civ.  App.  June  15,  2012)  (citing  Shaffer  v.  Regions  Fin.  Corp.,  29   So.3d  872,  880  (Ala.    2009)    (quoting  Reynolds  Metals  Co.  v.  Hill,  825  So.2d  100,  105   (Ala.2002)).    “The  elements  of  a  valid  contract  include:  an  offer  and  an  acceptance,   consideration,  and  mutual  assent  to  terms  essential  to  the  formation  of  a  contract.”  Ex  parte   Jackson  County  Bd.  of  Educ.,  4  So.3d  1099,  1103-­‐1104  (Ala.  2008),  (citing  Ex  parte  Grant,   711  So.2d  464,  465  (Ala.1997)  (quoting  Strength  v.  Alabama  Dep't  of  Fin.,  Div.  of  Risk  Mgmt.,   622  So.2d  1283,  1289  (Ala.1993)).       “The  purpose  of  a  signature  on  a  contract  is  to  show  mutual  assent[.]”  I.C.E.   Contractors,  Inc.    v.  Martin  &  Cobey  Const.  Co.,  58  So.  3d  723,  725  (Ala.  2010)  (quoting   Bowen  v.  Security  Pest  Control,  Inc.,  879  So.2d  1139,  1142  (Ala.2003)  (quoting  Ex  parte   Rush,  730  So.2d  1175,  1177–78  (Ala.1999))  (internal  citations  omitted).    “[H]owever,  the   existence  of  a  contract  may  also  be  inferred  from  other  external  and  objective   manifestations  of  mutual  assent.    Unless  a  contract  is  required  by  a  statute  to  be  signed  .  .  .   or  by  the  Statute  of  Frauds  to  be  in  writing  .  .  .  or  unless  the  parties  agree  that  a  contract  is   not  binding  until  it  is  signed  by  both  of  them  .  .  .  it  need  not  be  signed  by  the  party  against   whom  enforcement  is  sought,  provided  it  is  accepted  and  acted  upon.”  Id.,  at  725-­‐726.   “A  contract  implied  in  fact  requires  the  same  elements  as  an  express  contract,  and   differs  only  in  the  ‘method  of  expressing  mutual  assent.’  Implied  contracts  normally  arise  in   13 situations  where  there  is  a  bargained-­‐for  exchange  contemplated  by  the  parties,  but  no   overt  expression  of  agreement.”  Ex  parte  Jackson  County  Bd.  of  Educ.,  4  So.3d  1099,  1103  -­‐ 1104  (Ala.  2008)  (quoting  Ellis  v.  City  of  Birmingham,  576  So.2d  156,  157  (Ala.1991)   (quoting  Berry  v.  Druid  City  Hosp.  Bd.,  333  So.2d  796,  799  (Ala.1976)).    “Conduct  of  one   party  from  which  the  other  may  reasonably  draw  the  inference  of  assent  to  an  agreement  is   effective  as  acceptance.”    Ex  parte  Rush  at  1178.         D.    Analysis       There  is  no  dispute  that  Hand  Arendall  provided  legal  services,  that  Joiner  has   refused  to  pay  the  balance  due  for  those  services,  or  that  Hand  Arendall  has  been  damaged   by  the  failure  to  pay.    The  issue  is  whether  a  contract  was  formed  between  Hand  Arendall   and  Dr.  Joiner,  individually,  or  only  as  to  Dr.  Joiner  as  the  manager  of  Spreading  Oak.7  The   Court  has  considered  the  evidence  presented  and  finds  that  the  preponderance  of  the   evidence  shows  that  Dr.  Joiner  in  his  individual  capacity,  personally  and  by  way  of  his   attorney’s  communications  with  Hand  Arendall,  assented  to  the  formation  of  a  contract  for   legal  representation  by  Hand  Arendall.    This  representation  began  on  January  14,  2009.         There  was  no  written  expression  of  assent  from  Dr.  Joiner.    Thus,  the  Court  looks  to   the  actions  of  each  party  to  determine  whether  there  was  mutual  assent  to  an  arrangement   wherein  Hand  Arendall  would  represent  Dr.  Joiner  in  his  individual  capacity.    The  first   evidence  of  assent  comes  from  the  testimony  that  on  January  14,  2009,  a  telephone   conference  was  held  wherein  it  was  conclusively  agreed  between  Dr.  Joiner’s  agent,  Heman   Marshall,  and  Hand  Arendall  that  Hand  Arendall  would  represent  Dr.  Joiner.     7 There is no credible evidence to support the argument that Hester was the only client represented by Hand Arendall. 14   Next,  and  most  convincing,  is  the  way  the  conflict  of  interest  waivers  were  prepared   and  handled.    The  conflict  of  interest  waivers  clearly  show  Dr.  Joiner  as  the  client.    In   February  2009,  Dr.  Joiner  received  and  reviewed  with  Marshall  the  conflict  of  interest   waivers,  which  were  prepared  for  his  signature  in  his  individual  capacity.8    Thus,  Dr.  Joiner   was  clearly  on  notice  that  Hand  Arendall  believed  its  clients  to  be  Dr.  Joiner  and  Hester  in   their  individual  capacities.    Although  Dr.  Joiner  did  not  return  the  waivers,  he  also  did  not   disabuse  Hand  Arendall  of  its  alleged  misconception  that  Hand  Arendall  represented  him   on  an  individual  basis.      This  is  certainly  conduct  of  Dr.  Joiner  from  which  Hand  Arendall   could,  and  did,  reasonably  draw  the  inference  of  assent  to  an  agreement.    Also,  a  reasonable   inference  of  assent  is  drawn  from  the  silence  of  Dr.  Joiner  between  May  and  September   2009,  when  Hand  Arendall  represented  to  the  Bankruptcy  Administrator,  to  attorney   Jeffrey  Hartley,  and  to  Dr.  Joiner,  that  it  represented  Dr.  Joiner  in  the  transaction.       Mutual  assent  is  also  seen  in  Dr.  Joiner’s  interactions  with  Hand  Arendall  attorneys.     Dr.  Joiner  personally  communicated  with  Hand  Arendall  attorneys  to  give  them  specific   directions  about  proceeding  on  his  behalf  to  purchase  the  facility.      This  includes  continuing   to  seek  legal  advice  even  after  receiving  Hand  Arendall’s  bill,  which  indicated  that  Dr.  Joiner   was  the  client  being  held  responsible  for  the  legal  bills.       In  sum,  the  totality  of  the  evidence  weighs  in  favor  of  a  finding  that  Dr.  Joiner   assented  to  Hand  Arendall  representing  him  on  an  individual  basis  in  purchasing  the   facility.       8 After five months, the Asset Purchase Agreement for the failed venture was signed by Dr. Joiner as the manager of Spreading Oak on April 29, 2009 and submitted to the Bankruptcy Court on May 14, 2009 (Joiner Exhibit 5). 15   E.    Damages     Under  Alabama  law,  damages  for  breach  of  contract  “should  return  the  injured  party   to  the  position  he  would  have  been  in  had  the  contract  been  fully  performed.”    Hill  v.   Premier  Builders,  56  So.  3d  669,  678    (Ala.  Civ.  App.    2010).    The  parties  presented  no   dispute  as  to  the  accuracy  of  the  attorney’s  fees  or  the  reasonableness.    Hand  Arendall  has   provided  the  affidavit  of  Harwell  E.  Coale,  Jr.,  as  evidentiary  support  for  the  reasonableness   of  the  hourly  rate  and  the  time  incurred  (Hand  Arendall  Exhibit  24).      Accordingly,  the   Court  finds  that  the  fees  are  reasonable.       However,  the  Court  is  unable  to  determine  from  the  evidence  submitted  what  the   total  of  the  fees  are  starting  on  January  14,  2009,  as  the  requested  damages  appear  to  begin   with  services  rendered  before  January  14,  2009.      Hand  Arendall  has  until  September  7,   2012,  to  amend  their  request  for  damages,  with  explanation,  to  conform  to  the  court’s   factual  findings.       IV.   Conclusion       For  the  reasons  set  forth  herein,  it  is  ORDERED  that  the  Court  finds  in  favor  of  Hand   Arendall  on  Count  One  of  its  complaint  for  breach  of  contract.       DONE  and  ORDERED  this  the  31st  day  of  August,  2012.       /s/  Kristi  K.  DuBose   KRISTI  K.  DuBOSE   UNITED  STATES DISTRICT JUDGE 16

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