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)

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.

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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