LYONS, Justice.
DGB, LLC ("DGB"), David P. Herrick, Bradley P. Katz, and C. Gibson Vance appeal from a judgment of the Baldwin Circuit Court dismissing their claims against multiple defendants. We affirm the trial court's judgment in part, reverse it in part, and remand the case to the trial court for further proceedings.
Herrick, Katz, and Vance own DGB. DGB is part-owner of a limited liability company known as Bon Harbor, LLC ("Bon Harbor"). On February 5, 2008, DGB, Herrick, Katz, and Vance (collectively "the investors") sued Michael Hinds; Paul Kirkland; Ray Jacobsen; Decatur, LLC ("Decatur"); Gulf Stream Properties, Inc. ("Gulf Stream"); Fruitticher-Lowery Appraisal Group, Inc. ("Fruitticher"); and Seaside Title Company, LLC ("Seaside"), in the Montgomery Circuit Court. The complaint stated claims of fraudulent misrepresentation, fraudulent suppression, securities fraud, shareholder oppression, breach of fiduciary duty, negligence, and conspiracy against the various named defendants. The complaint alleged misconduct by the defendants related to Bon Harbor's July 2005 purchase of real property located in Baldwin County.
The investors amended their complaint in May 2008 to add Eden Jones Hinds, Michael Hinds's wife, as a defendant and to add claims against the Hindses for conversion, unjust enrichment, and fraudulent transfer. In October 2008, the action was transferred to the Baldwin Circuit Court. Gulf Stream and Kirkland subsequently moved to dismiss the claims against them. They argued that that the investors' claims were barred by the applicable statutes of limitation; that the investors lacked standing; that the investors had failed to state a claim upon which relief could be granted, see Rule 12(b)(6), Ala. R. Civ. P.; and that the investors had failed to plead their fraud claims with particularity as required by Rule 9(b), Ala. R. Civ. P. Decatur and the Hindses filed an identical motion. The investors responded and moved to amend their complaint. On March 3, 2009, except for the fraudulent-transfer claim asserted against the Hindses, the trial court dismissed the investors' claims against Gulf Stream, Kirkland, Decatur, and the Hindses. On the same day, the trial court granted the investors' motion for leave to amend their complaint.
Jacobsen, Fruitticher, and Seaside then moved to dismiss the investors' claims against them, asserting the same arguments as the other defendant. The investors responded and filed a second amended complaint, adding a claim for an accounting and dissolution of Bon Harbor. Within a week, the investors filed a third amended complaint, stating the same claims and noting that the new complaint "address[ed]
In their brief on appeal, the investors expressly waive any appeal from the trial court's dismissal of their claims against Fruitticher and Seaside and from the trial court's dismissal of their claims alleging conversion and unjust enrichment against the Hindses. The investors' fraudulent-transfer claim against the Hindses remains pending before the trial court. Accordingly, the only claims before us are the investors' claim seeking an accounting and dissolution of Bon Harbor and their claims alleging fraudulent misrepresentation, fraudulent suppression, securities fraud, shareholder oppression, breach of fiduciary duty, negligence, and conspiracy against Gulf Stream, Kirkland, Decatur, Michael Hinds ("Hinds"), and Jacobsen. In their third amended complaint the investors allege the following facts relevant to those claims.
Hinds and Kirkland, through other entities, own Decatur and Gulf Stream. In early 2005, Decatur and Gulf Stream formed Bon Harbor to purchase and develop real property in Baldwin County. At about the same time, Hinds and Kirkland asked Herrick, Katz, and Vance to invest in the development. Herrick, Katz, and Vance agreed, and in June 2005, their company, DGB, purchased a 40% interest in Bon Harbor for $2,000,000. Bon Harbor, therefore, is owned by Decatur, Gulf Stream, and DGB.
Hinds and Kirkland acted as managers of Bon Harbor. The investors allege that they entrusted Hinds and Kirkland "to negotiate and execute land transactions on behalf of Bon Harbor because of their purported expertise and their respective roles as Managing Members having authority to make managerial decisions." The investors also allege that, as managers and, through Decatur and Gulf Stream, as alleged majority members of Bon Harbor, Hinds and Kirkland owed them "fiduciary obligations to protect the legitimate investment expectations of the [investors] and to disclose material facts surrounding Bon Harbor's business activities, including facts surrounding the purchase of" real property by Bon Harbor.
Bon Harbor purchased 14.36 acres of real property in Baldwin County ("the property") on July 6, 2005 ("the July 2005 transaction").
Bon Harbor purchased the property from Jacobsen. Unknown to the investors, just days before Bon Harbor purchased the property for $10,000,000, Jacobsen had purchased the property for $5,000,000. The third amended complaint does not state from whom Jacobsen purchased the property. The investors allege that Hinds and Kirkland, and through them Decatur and Gulf Stream, knew that Jacobsen had purchased the property for one-half what Bon Harbor paid for it but concealed that fact from the investors, "before, during, and after" the July 2005 transaction. The investors allege that the information concealed was "entirely under the control" of Hinds and Kirkland and that the investors "did not have access" to it. The investors also allege that Hinds, Kirkland, Decatur, and Gulf Stream had fiduciary duties to disclose facts material to the July 2005 transaction—including Jacobsen's purchase price—to them but failed to do so.
The investors also allege that before Jacobsen purchased the property, he "obtained" funds from Bon Harbor and that Hinds and Kirkland used Bon Harbor assets to obtain options on and to develop their own properties adjacent to the property purchased by Bon Harbor. The investors allege that Hinds and Kirkland concealed all of this information from them.
The investors allege that they "relied on the defendants' silence by forgoing independent initiatives to obtain the property records for themselves to learn whether their fiduciaries were committing a fraud." They also allege that they did not have actual knowledge of the concealed facts until 2007 when they were deposed in separate litigation initiated by United Bank related to the transaction ("the United Bank litigation") and that they could not have had constructive knowledge of the facts concealed until February 6, 2006, when Hinds and Kirkland sent them tax documents related to the July 2005 transaction.
We review the trial court's dismissal of the investors' claims de novo.
Nance v. Matthews, 622 So.2d 297, 299 (Ala.1993).
The trial court did not specify the grounds for its dismissal of the investors'
The events giving rise to the investors' claims occurred in July 2005. The investors filed their initial complaint in February 2008, more than two and a half years later. Regarding the investors' claim for an accounting and dissolution of Bon Harbor, § 10-12-38, Ala.Code 1975, provides:
(Emphasis added.) Accordingly, DGB, as a member of Bon Harbor, could have sought a judicial dissolution of Bon Harbor "whenever" DGB could show that it was "not reasonably practicable to carry on the business in conformity with" Bon Harbor's articles of organization. § 10-12-38. As a result, there is no basis for concluding that this claim is time-barred by a statute of limitations.
A two-year statutory limitations period applies to each of the investors' remaining claims. See, e.g., §§ 6-2-38(l), and 8-6-19(f), Ala.Code 1975. The defendants, therefore, argue that these claims are untimely and are barred by the applicable statutes of limitation. The investors argue that all of their remaining claims fall within the savings clause of § 6-2-3, Ala.Code 1975, which states:
The investors argue that § 6-2-3 applies not only to their fraud-based claims—fraudulent misrepresentation, fraudulent suppression, and securities fraud—but also to their remaining claims of shareholder oppression, breach of fiduciary duty, civil conspiracy, and negligence.
In B & B Properties v. Dryvit Systems, Inc., 708 So.2d 189 (Ala.Civ.App.1997), the Court of Civil Appeals found a plaintiff's assertion of tolling based on fraudulent concealment "without merit," stating: "There is no `discovery rule' that tolls the running of the limitations period with respect to negligence or wantonness actions. The `discovery rule' is applicable only to fraud actions." 708 So.2d at 192 (citing Henson v. Celtic Life Ins. Co., 621 So.2d 1268, 1274 (Ala.1993)).
Because § 6-2-3 "applies to the fraudulent concealment of the existence of
This Court has held that to show that a plaintiff's claims fall within the savings clause of § 6-2-3 a complaint must allege the time and circumstances of the discovery of the cause of action. See, e.g., Angell v. Shannon, 455 So.2d 823, 823-24 (Ala.1984); Papastefan v. B & L Constr. Co., 356 So.2d 158, 160 (Ala.1978). The complaint must also allege the facts or circumstances by which the defendants concealed the cause of action or injury and what prevented the plaintiff from discovering the facts surrounding the injury. See, e.g., Smith v. National Sec. Ins. Co., 860 So.2d 343, 345, 347 (Ala.2003); Lowe v. East End Mem'l Hosp. & Health Ctrs., 477 So.2d 339, 341-42 (Ala.1985); Miller, 409 So.2d at 422. See also Amason, 369 So.2d at 550.
In Miller, the plaintiffs, husband and wife, sued a medical clinic and the manufacturer of a contraceptive device that they alleged had injured the wife some years before. Regarding concealment, the plaintiffs alleged only that the clinic and the manufacturer had "`fraudulently conceal[ed] the defective and unreasonably dangerous condition of [the] product from the Plaintiff after they knew said product was defective and dangerous.'" 409 So.2d at 422. This Court stated:
409 So.2d at 422 (emphasis added).
In Lowe, the administrator of a decedent's estate sued a hospital in 1983 seeking recovery for the decedent's alleged wrongful death in 1980. The plaintiff alleged simply that the hospital had fraudulently concealed its conduct from the plaintiff and had denied causing the decedent's death. The plaintiff further alleged that he "`discovered in July of 1983 representations of [the hospital] were false and that [the hospital] had fraudulently concealed
In Smith, the plaintiff alleged multiple tort claims against an insurance company and alleged that she had discovered her claims within two years of filing her complaint when she "`heard in her community that there may be something wrong with her insurance policy.'" 860 So.2d at 345-46. Relying on Miller and Lowe, this Court concluded that Smith's complaint "`fail[ed] to allege any of the facts or circumstances by which the appellees concealed the cause of action or injury,' and `fail[ed] to allege what prevented [Smith] from discovering facts surrounding the [fraud].'" 860 So.2d at 347 (quoting Miller, 409 So.2d at 422).
Based on Miller, Lowe, and Smith, the defendants argue that the investors have not alleged facts or circumstances by which the defendants concealed a cause of action nor have they alleged what prevented the investors from discovering the facts the investors allege were concealed. Therefore, the defendants argue, the trial court properly dismissed the investors' claims. We disagree. Although the third amended complaint is not likely to be considered for inclusion in a form book as a model complaint, unlike the generalized allegations at issue in Miller, Lowe, and Smith, the investors have alleged more than just the circumstances of their discovery of their claims and that the defendants concealed them. Viewed in the light most favorable to the investors see Nance, 622 So.2d at 299 the third amended complaint alleges 1) the time and circumstances of the investors' discovery of their causes of action 2) the facts of circumstances by which the defendants concealed the investors' causes of action or injury and 3) what prevented the investors from discovering the facts surrounding their injury.
First, the investors allege that they discovered their causes of action when they were deposed in 2007 in the United Bank litigation. The investors, therefore, allege the time and circumstances of their discovery of their causes of action. See Angell, 455 So.2d at 823-24; Papastefan, 356 So.2d at 160.
Second, the investors allege that Jacobsen had obtained funds from Bon Harbor before he purchased the property; that Hinds and Kirkland used Bon Harbor funds for their own purposes, and that the defendants knew and concealed these facts from the investors. The investors also allege that the defendants knew that Jacobsen had purchased the property for $5,000,000 just days before the July 2005 transaction; that this information was entirely under the control of the defendants; and that the defendants concealed "and otherwise prevented" the investors from discovering the information before, during, and after the July 2005 transaction. The investors, therefore, allege the facts or circumstances by which the defendants concealed the investors' causes of action or injury. See Miller, 409 So.2d at 422; Lowe, 477 So.2d at 342; and Smith, 860 So.2d at 347.
Regarding this point, the investors also allege that Hinds, Decatur, Kirkland, and Gulf Stream had fiduciary obligations to disclose to them information concerning the July 2005 transaction but failed to do so. Specifically, the investors allege that Hinds and Kirkland were acting as managers of Bon Harbor and that the investors entrusted the negotiation and consummation of the July 2005 transaction to Hinds and Kirkland because of their superior knowledge and experience. The investors also allege that Decatur and Gulf Stream
In their briefs on appeal, the parties argue extensively regarding the merits of the questions whether Hinds, Decatur, Kirkland, and Gulf Stream owed the investors any duty to disclose information and whether fiduciary relationships existed among them. However, whatever may later be determined in the trial court proceedings, this appeal comes to us from the trial court's dismissal of the investors' claims and "this Court does not consider whether the [investors] will ultimately prevail, but only whether [they] may possibly prevail." Nance, 622 So.2d at 299. When the allegations of the third amended complaint are viewed most strongly in the investors' favor, see Nance, supra, the investors allege 1) that fiduciary and other relationships existed between them and Hinds, Decatur, Kirkland, and Gulf Stream that obligated those defendants to disclose information to the investors and 2) that those defendants failed to do so. Based on these allegations, we cannot say that investors cannot possibly prevail on this point. The investors, therefore, have sufficiently alleged that the defendants owed them duties to disclose information and that they breached those duties as an additional fact or circumstance by which Hinds, Decatur, Kirkland and Gulf Stream concealed the investors' causes of action or injury. See Miller, Lowe, and Smith supra.
Finally, the third amended complaint alleges that the investors had no actual knowledge of the fact that Jacobsen had obtained Bon Harbor funds before he purchased the property, of Hinds and Kirkland's personal use of Bon Harbor funds, or of the fact that Jacobsen paid $5,000,000 for the property; that the investors did not have access to that information because it was entirely under the control of the defendants; that the investors entrusted the negotiation and execution of the purchase to Hinds and Kirkland; and that the investors did not obtain the property records underlying the transaction because they relied on the defendants' silence and representations regarding the purchase price. Accordingly, the investors have alleged the circumstances that prevented their discovery of the facts surrounding their injury. See Miller, Lowe, and Smith, supra. Any question regarding the reasonableness of the investors' actions or inactions is not yet before us. See Nance, supra. Whatever may be shown at any subsequent trial proceedings, the investors have alleged sufficient facts showing that their claims fall within the savings clause of § 6-2-3. Accordingly, the dismissal of the investors' claims on the ground of the statute of limitations at this stage of the proceedings was error.
The parties next dispute whether the investors have standing to maintain their claims against the defendants. The defendants argue that any injury resulting from their actions is an injury to Bon Harbor, not to the investors. The defendants argue that the investors' claims are therefore derivative in nature and that, as a result, 1) Herrick, Katz, and Vance have no standing to seek relief individually, and 2) DGB was required to first demand that Bon Harbor sue the defendants and, if that demand was unsuccessful, to then pursue a derivative claim under § 10-12-25, Ala. Code 1975.
The defendants cite this Court's decision in Carey v. Howard, 950 So.2d 1131 (Ala. 2006). Carey involved property held by a family-owned limited liability company ("the LLC"). Certain members of the LLC ("the petitioners") sought a judgment declaring that another member's option to purchase an interest in the LLC's property for a price allegedly below market value was unenforceable. On appeal, this Court considered whether the petitioners had standing to maintain their claim for declaratory relief. Based on the language of the Declaratory Judgment Act, § 6-6-223, Ala.Code.1975, this Court stated that the petitioners had "standing to seek declaratory relief relating to the option agreement only if they [were] `interested under' or if their `rights, status, or other legal relations [were] affected by' the option agreement." 950 So.2d at 1135. This Court determined that, because the challenged option related only to an interest in property held by the LLC, the only injury alleged by the petitioners was an injury to the LLC. As a result, this Court determined that "any right to bring a declaratory-judgment action with respect to that injury rest[ed] with the LLC" and could be pursued only by the LLC itself or by the plaintiffs derivatively under § 10-12-25. 950 So.2d at 1136. This Court further concluded that the petitioners had not alleged any injury to their separate individual interests in the property held by the LLC and therefore that they "lacked standing to seek declaratory relief in their individual capacities" 950 So.2d at 1137.
In this case, the investors have not attempted to state any derivative claim on behalf of Bon Harbor; instead they assert claims only on their own behalf. They allege that the defendants made representations directly to and concealed information directly from them regarding the circumstances surrounding the July 2005 transaction. They allege that they relied on the defendants' representations and concealments and that, as a result, Herrick, Katz, and Vance personally guaranteed the $7,500,000 loan from United Bank and, therefore, were personally interested in the July 2005 transaction. The investors also allege that neither Hinds nor Kirkland contributed any funds to the July 2005 transaction and that the investors were required to pay the remaining $2,500,000 of the purchase price. Based on these allegations, the investors argue that they suffered individual injury as a result of the defendants' actions.
To the extent that the third amended complaint states injury to Bon Harbor as a result of the defendants' conduct, the investors have no standing to recover on Bon Harbor's behalf. However, based on the allegations described above, unlike the circumstances presented in Carey, we conclude that the investors have alleged injury to themselves individually; that their claims are not derivative in nature; and, therefore, that they had standing to maintain their claims against the defendants.
Finally, the investors argue on appeal that the trial court erred in dismissing their claims because, they argue, their claims of fraudulent misrepresentation, fraudulent suppression, and securities
The investors asserted their claim of fraudulent misrepresentation against Hinds, Decatur, Kirkland, Gulf Stream, and Jacobsen. Rule 9(b), Ala. R. Civ. P., provides: "In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally." The Committee Comments on 1973 Adoption of Rule 9 explain:
See also Bethel v. Thorn, 757 So.2d 1154, 1158 (Ala.1999). "The purpose of this rule is to give fair notice to the opposing party." Winn-Dixie Montgomery, Inc. v. Henderson, 371 So.2d 899, 901 (Ala.1979); see also Kabel v. Brady, 519 So.2d 912, 916 (Ala.1987).
In their third amended complaint, the investors allege the following facts regarding Hinds, Decatur, Kirkland and Gulf Stream: 1) that Jacobsen purchased the property for $5,000,000 just days before the July 2005 transaction; 2) that Hinds, Decatur, Kirkland, and Gulf Stream knew and concealed this information from the investors; 3) that this information was entirely under the control of those defendants; 4) that they concealed from "and otherwise prevented" the investors from discovering the information before, during, and after the purchase of the property; 5) that Hinds and Kirkland obtained an appraisal of the property for $14,000,000 with knowledge that Jacobsen had purchased the property for $5,000,000 only days before; 6) that Hinds and Kirkland reported that the purchase price of the property was $10,000,000; 7) that Bon Harbor purchased the property for $10,000,000 and that Herrick, Katz, and Vance personally guaranteed the $7,500,000 loan from United Bank, and the investors were required to contribute the remaining $2,500,000 toward the transaction; and 8) that the investors did not obtain the property records underlying the July 2005 transaction because they relied on Hinds's and Kirkland's silence and representations regarding the transaction.
Based on the foregoing, it is apparent that the investors allege the time of the misrepresentations made by Hinds, Decatur, Kirkland, and Gulf Stream (July 2005), the content of the misrepresentations (that the purchase price of the property was $10,000,000 and the appraised value of the property was $14,000,000), the facts misrepresented (that the value of the property was $5,000,000), the defendant's knowledge of the falsity of the representations (Hinds,
The investors did not allege the place where the misrepresentations occurred. However, their third amended complaint included sufficient allegations to place the defendants on notice of the acts complained of; the investors, therefore, satisfied the requirements of Rule 9(b). See VanLoock v. Curran, 489 So.2d 525, 534 (Ala.1986)("While the pleading is perhaps not a model of clarity and specificity, it sufficiently comports with the purpose of Rule 9(b) in that it gives the defendants fair notice of the acts complained of.") The trial court, therefore, erred in dismissing the investors' fraudulent-misrepresentation claim as to Hinds, Decatur, Kirkland and Gulf Stream.
Regarding Jacobsen, the investors have alleged only that he sold the property to Bon Harbor for more than he paid for it. It does not appear from the allegations of the third amended complaint that Jacobsen had any direct dealings with the investors or that he misrepresented any material facts to them. Accordingly, the investors have not pleaded their claim of fraudulent misrepresentation against Jacobsen with particularity as required by Rule 9(b). The trial court, therefore, correctly dismissed this claim as to Jacobsen.
The investors asserted their claim of fraudulent suppression against Gulf Stream, Kirkland, Decatur, Hinds, and Jacobsen. The elements of a claim of fraudulent suppression are: "`(1) a duty on the part of the defendant to disclose facts; (2) concealment or nondisclosure of material facts by the defendant; (3) inducement of the plaintiff to act; (4) action by the plaintiff to his or her injury.'" Freightliner, L.L.C. v. Whatley Contract Carriers, L.L.C., 932 So.2d 883, 891 (Ala.2005) (quoting Lambert v. Mail Handlers Benefit Plan, 682 So.2d 61, 63 (Ala.1996)). This claim must be pleaded with particularity under Rule 9(b).
Regarding a duty to disclose, the investors allege 1) that Hinds and Kirkland, as managers of Bon Harbor, had a duty to disclose material facts regarding the July 2005 transaction to the investors; 2) that Decatur and Gulf Stream, as members of Bon Harbor, had a duty to disclose material facts regarding the July 2005 transaction to the investors; 3) that Hinds, Decatur, Kirkland, and Gulf Stream had fiduciary relationships with the investors under which they had a duty to disclose material facts regarding the July 2005 transaction to the investors; and 4) that the investors entrusted Hinds and Kirkland with the negotiation of the July 2005 transaction based on their superior experience and knowledge.
As to Jacobsen, the investors have not alleged that he had any duty to disclose information to them. Therefore, the investors have not sufficiently pleaded their claim of fraudulent suppression against Jacobsen. As to Hinds, Decatur, Kirkland, and Gulf Stream, as discussed above, the parties argue extensively regarding the merits of the question whether these defendants owed a duty to disclose to the investors or had any fiduciary relationship with them. As stated above, at this stage of the litigation we must consider only whether the investors have stated any set of facts upon which they may possibly prevail. See Nance, supra. Considering
Regarding the concealment or nondisclosure of material facts by Hinds, Decatur, Kirkland, and Gulf Stream, the investors allege 1) that Jacobsen had obtained funds from Bon Harbor before he purchased the property; 2) that Hinds and Kirkland used Bon Harbor funds for their own purposes; 3) that Jacobsen purchased the property for $5,000,000 just days before Bon Harbor purchased it from him for $10,000,000; 4) that the defendants knew of these facts and that the information was entirely in the control of the defendants; and 5) that the defendants concealed from "and otherwise prevented" the investors from discovering the information before, during, and after the transaction. The investors have therefore alleged that Hinds Decatur Kirkland and Gulf Stream concealed material facts regarding the July 2005 transaction from them.
Regarding whether these defendants induced the investors to act, the investors allege that they participated in the July 2005 transaction and that they did not obtain the property records underlying the transaction because they relied on the actions, silence, and representations of Hinds, Decatur, Kirkland, and Gulf Stream. Finally, regarding whether the investors acted to their injury, they allege that Bon Harbor purchased the property for twice its value, that Herrick, Katz, and Vance personally guaranteed the $7,500,000 Union Bank loan, and that the investors contributed $2,500,000 to the transaction. The investors, therefore, have alleged each element of their fraudulent-suppression claim against Hinds, Decatur, Kirkland, and Gulf Stream with particularity as required by Rule 9(b). Therefore, the trial court correctly dismissed the fraudulent-suppression claim as to Jacobsen but erred in dismissing that claim as to Hinds, Decatur, Kirkland, and Gulf Stream.
Section 8-6-19(a)(2), Ala.Code 1975, grants the buyer of a security a right of action against a seller who sold the security "by means of any untrue statement of a material fact or any omission to state a material fact." This Court has stated: "[A] claim of a violation of § 8-6-19(a)(2), Ala.Code 1975, requires (1) a sale or an offer to sell a security (2) by means of a false statement or omission (3) of material fact and (4) the ignorance of the buyer as to the untruth or omission." Blackmon v. Nexity Fin. Corp., 953 So.2d 1180, 1191 (Ala.2006). This claim must be pleaded with particularity under Rule (b).
The investors asserted their claim of securities fraud against Hinds, Decatur, Kirkland, and Gulf Stream. In their briefs on appeal, the investors maintain that this claim relates to DGB's purchase of a 40% interest in Bon Harbor in June 2005. It is unclear whether a claim under § 8-6-19(a)(2) may arise from the sale of an interest in an LLC. Moreover, the investors have not alleged any false statement or omission of material fact by Hinds, Decatur, Kirkland, or Gulf Stream relating to DGB's purchase of an interest in Bon Harbor. The investors, therefore, have not stated a claim of securities fraud upon which relief can be granted, and the trial court did not err in dismissing the claim.
The investors asserted a claim of shareholder oppression against Hinds, Decatur,
This Court has stated:
Jimmy Day Plumbing & Heating, Inc. v. Smith, 964 So.2d 1, 9 (Ala.2007) (emphasis added). Because the investors have not complied with the requirements of Rule 28(a)(10), Ala. R. Civ. P., we will not consider their arguments as to this claim, and we affirm the trial court's dismissal of this claim.
The investors allege a claim of breach of fiduciary duty against Hinds, Decatur, Kirkland, and Gulf Stream. In Bank of Red Bay v. King, 482 So.2d 274 (Ala.1985), a fiduciary or confidential relationship was defined:
482 So.2d at 284. See also K & C Dev. Corp. v. AmSouth Bank, N.A., 597 So.2d 671, 675 (Ala.1992). As discussed above, the investors have sufficiently alleged the existence of fiduciary relationships with
The investors state a claim of civil conspiracy against Hinds, Decatur, Kirkland, Gulf Stream, and Jacobsen based on an alleged conspiracy among them to "commit the . . . intentional torts" alleged in their third amended complaint. This Court has stated:
Ex parte Reindel, 963 So.2d 614, 621 n. 11 (Ala.2007). "A civil conspiracy claim operates to extend, beyond the active wrongdoer, liability in tort to actors who have merely assisted, encouraged, or planned the wrongdoer's acts." 16 Am.Jur.2d Conspiracy § 57 (2009). "A plaintiff alleging a conspiracy must have a valid underlying cause of action. [Drill Parts & Serv. Co. v. Joy Mfg. Co., 619 So.2d 1280 (Ala.1993).] `[A] conspiracy claim must fail if the underlying act itself would not support an action.' Triple J Cattle, Inc. v. Chambers, 621 So.2d 1221, 1225 (Ala.1993)." Callens v. Jefferson County Nursing Home, 769 So.2d 273, 280 (Ala.2000). Based on these principles, the defendants argue that, because the investors' underlying claims were dismissed, the trial court also correctly dismissed their claim of civil conspiracy.
We have previously concluded that the trial court erred in dismissing the investors' claims of fraudulent misrepresentation and fraudulent suppression as they relate to Hinds, Decatur, Kirkland, and Gulf Stream. The investors allege that those defendants agreed and worked together, with Jacobsen, to knowingly misrepresent information to and conceal material facts from the investors. The investors, therefore, have alleged that this combination of persons and entities—Hinds, Decatur, Kirkland, Gulf Stream, and Jacobsen—agreed and acted together to engage in unlawful conduct that injured the investors. Because the investors have alleged valid underlying causes of action and because acts of coconspirators are attributable to each other, see Reindel, supra, the investors have stated a claim of civil conspiracy upon which relief may be granted against each of these defendants. Accordingly, the trial court erred in dismissing this claim.
The investors state a negligence claim against Hinds and Kirkland. "In any negligence case, the plaintiff bears
In their brief on appeal, the investors do not cite any authority to support their argument that the trial court erred in dismissing their claim for an accounting and dissolution of Bon Harbor. As noted above, Rule 28(a)(10), Ala. R. Civ. P., requires that appellants support their arguments with citations to authority. "`"[I]t is not the function of this Court to do a party's legal research or to make and address legal arguments for a party based on undelineated general propositions not supported by sufficient authority or argument."'" Jimmy Day Plumbing, 964 So.2d at 9 (quoting Butler v. Town of Argo, 871 So.2d 1, 20 (Ala.2003), quoting in turn Dykes v. Lane Trucking Inc., 652 So.2d 248, 251 (Ala.1994)). Because the investors have failed to comply with the requirements of Rule 28(a)(10) as to this claim, we will not consider their arguments and we affirm the trial court's dismissal of this claim. We note, however, that the resolution of the remaining claims in this proceeding on remand may give rise to new facts and circumstances that are compatible with a renewal of the matters made the basis of this claim.
Accordingly, we affirm the trial court's dismissal of the investors' claim for an accounting and dissolution of Bon Harbor, of their fraudulent-misrepresentation and fraudulent-suppression claims against Jacobsen, and of their claims of securities fraud and shareholder oppression. We reverse the trial court's dismissal of the investors' claims of breach of fiduciary duty, civil conspiracy, negligence and, as they relate to Hinds, Decatur, Kirkland, and Gulf Stream, their claims of fraudulent misrepresentation and fraudulent suppression. We remand the cause to the trial court for further proceedings consistent with this opinion.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
COBB, C.J., and WOODALL, STUART, SMITH, BOLIN, PARKER, and MURDOCK, JJ., concur.
