244 So. 3d 949
Ala.2017Background
- In 2004 Price, Goode, and Lunsford formed Riverfront Development, LLC to develop the Riverwalk property; Price and Lunsford owned individual interests in the property and later conveyed those interests in a 2009 closing.
- In July 2009 Price executed closing documents and an assignment transferring his interest; he alleges he was told Danny Butler was purchasing Riverfront and the Riverwalk property but later learned Butler never acquired an interest.
- Price filed a fraud-based complaint in December 2014 against Lunsford and Alabama One Credit Union asserting fraudulent misrepresentation, suppression, promissory fraud, breach of duties, tortious interference, and conspiracy.
- Defendants moved to dismiss under Rule 12(b)(6), arguing the claims were time-barred by the two-year statute of limitations and that Price failed to plead fraud with particularity; they attached a prior (voluntarily dismissed) 2013 complaint and a July 15, 2009 assignment-of-interest to their motion.
- Trial court granted the dismissal as barred by limitations; the Court of Civil Appeals treated the motion as converted to summary judgment and affirmed, concluding Price could not reasonably have relied on the alleged misrepresentations.
- The Alabama Supreme Court reversed: it held the trial court's order did not show it considered materials outside the pleadings (so no conversion), found Price adequately alleged discovery and concealment for tolling under Ala. Code § 6-2-3, and determined genuine factual disputes exist precluding dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Rule 12(b)(6) motions were converted into summary-judgment motions | Price argued the trial court did not consider materials outside the complaint and thus motions remained dismissals | Defendants argued their attachments (assignment, prior complaint) were outside the pleadings and the court effectively considered them, requiring conversion | Court held conversion did not occur because the trial court's order and record do not show it relied on materials outside the complaint |
| Whether Price's claims are time-barred or tolled under the fraud savings clause (§ 6-2-3) | Price alleged he discovered the fraud on Dec. 29, 2012 (conversation with Griffin), and pleaded facts describing concealment and why he could not earlier discover the fraud | Defendants argued facts available in July 2009 (settlement statement, assignment) should have put Price on notice and started the limitations period | Court held Price alleged sufficient time and circumstances of discovery and concealment to invoke tolling; dismissal on statute-of-limitations grounds was error |
| Whether, even if converted, summary judgment would be appropriate | Price submitted affidavits and factual assertions raising credibility and timing disputes about who was actually purchasing Riverfront | Defendants contended the assignment and closing documents negate reasonable reliance and show notice in 2009 | Court held that, assuming conversion, genuine issues of material fact exist that preclude summary judgment |
| Whether plaintiff pled fraud with requisite particularity | Price relied on verified complaint, emails, settlement statements, deed, and affidavits to plead time, manner, and concealment | Defendants argued pleading defects and that the Statute of Frauds or the written closing instruments defeat the claims | Court found Price's complaint (and attachments) sufficiently alleged discovery, concealment, and reliance to survive dismissal |
Key Cases Cited
- Nance v. Matthews, 622 So.2d 297 (Ala. 1993) (standard for Rule 12(b)(6) review—plaintiff may possibly prevail)
- Universal Underwriters Ins. Co. v. Thompson, 776 So.2d 81 (Ala. 2000) (court must show it considered matters outside pleadings before treating a 12(b) motion as summary judgment)
- Phillips v. AmSouth Bank, 833 So.2d 29 (Ala. 2002) (unless trial court expressly declines to consider extraneous material, its conclusions may be construed to include it)
- DGB, LLC v. Hinds, 55 So.3d 218 (Ala. 2010) (when complaint is facially time-barred, it must show entitlement to tolling under § 6-2-3 with time and circumstances of discovery)
- McCullough v. Alabama By-Products Corp., 343 So.2d 508 (Ala. 1977) (exhibits attached to a pleading become part of the pleading)