Mandamus - Scope of Discovery - Business Dispute - Personal Financial Records - Income Tax Records - Ex Parte Action Auto Sales, Inc.


Ex parte Action Auto Sales, Inc., [Ms. 1160598, Sept. 1, 2017] __ So. 3d __ (Ala. 2017). In this unanimous decision by Justice Sellers, (Stuart, C.J., Bolin, Parker, Shaw, Main, Wise, and Bryan, JJ., concur) the Court issues a writ of mandamus directing the circuit court to vacate an order requiring production of Vivian Paul’s personal financial records. Paul is the sole shareholder of Action Auto Sales (“AAS”) which provided financing to a retail car lot, Pine City Motors. AAS sued Pine City and buyers of a vehicle from Pine City, Stewart and Cargile, for return of a vehicle that was allegedly security for a loan by AAS to Pine City. Stewart and Cargile counterclaimed against AAS and cross-claimed against Pine City. Paul testified that she had kept financial records on a personal computer showing the amounts of financing provided by AAS to Pine City but that the information on the computer had been lost. Paul also testified that her accountant would have duplicate records of the loan information stored on her old computer.

Following Paul’s deposition, Stewart and Cargile filed notices of intent to subpoena information from Merchants Bank (where Paul banked) and Paul’s accountant seeking all financial records of AAS as well as Paul’s personal financial records. Ms. *4.

AAS objected to the subpoena for Paul’s personal financial records as irrelevant and on the ground that their production would invade Paul’s privacy. The Court rejected Stewart and Cargile’s argument that AAS did not have “standing” to challenge the issuance of the non-party subpoenas based on Paul’s privacy interest and alleged irrelevancy of the information sought. Ms. *5, n. 1.

In accepting AAS’s argument that mandamus should issue directing the trial court to vacate its order requiring production of Paul’s personal financial records, the Court relied heavily on Ex parte Morris, 530 So. 2d 785 (Ala. 1988). In Morris, the Court had issued mandamus vacating an order compelling plaintiff’s expert witness to produce income tax records and other personal financial information. Ms. *7. The Court noted that per its decision in Morris, that a qualified privilege exists for tax records and that “‘high standards of relevancy [must be met] before parties will be ordered to reveal such records.’” Ms. *7, quoting Morris, 530 So. 2d at 788.

The Court rejected Stewart and Cargile’s argument that Paul’s testimony that she lost access to her records evidencing loans and contributions she had made to AAS justified production of her personal financial information. The Court rejected this spoliation argument holding “[t]his Court, however, fails to see how Paul’s alleged concealment or disposal of records, even if established, makes her personal financial information, unrelated to loans and contributions to AAS, relevant to the claims in the present case.” Ms. *11-12.

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