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Assignment - Tortious Interference - Amendment Of Pleadings: Fitzpatrick V. Hoehn

Fitzpatrick v. Hoehn, [Ms. 1160348, 1160393, Mar. 2, 2018] __ So. 3d __ (Ala. 2018). This decision by Justice Parker, (Stuart, C.J., and Bolin, Main, Wise, Bryan, and Mendheim, JJ., concur; Shaw and Sellers, JJ., concur in the result) reverses the Baldwin Circuit Court’s judgment in favor of Fitzpatrick on claims against her mother Margaret Hoehn (Margaret), for interference with a contract and business relations, and affirms the judgment in favor of Margaret on her counterclaim.

This dispute arose out of the Foley flea market jointly owned by John Hoehn and his wife Margaret. John and Margaret entered into an agreement to sell John’s one-half undivided interest in the property to their daughter, Fitzpatrick, for $400,000. Ms. *2. The agreement called for monthly payments over a thirty-year term and stipulated that Fitzpatrick was entitled to enter possession of the property so long as she was not in default under the agreement. Ms. *2-3. Several years after the agreement was executed, John deeded by quitclaim his one-half interest in the property to his wife Margaret. Thereafter, Margaret changed the locks on the property so that Fitzpatrick could no longer access the property or operate the flea market. Ms. *4.

Following the execution of the quitclaim deed by John to Margaret, Fitzpatrick stopped making payments on the $400,000 purchase agreement and withdrew $795,000 in joint bank accounts held by Fitzpatrick and Margaret. Ms. *4-5. In June 2014, Fitzpatrick filed a lawsuit in which she later submitted numerous amended complaints asserting a total of fifteen claims against Margaret. Margaret filed a counterclaim against Fitzpatrick seeking recovery of the $795,000 Fitzpatrick had withdrawn from the bank accounts.

The circuit court dismissed Fitzpatrick’s breach of contract claim against Margaret, but submitted to the jury Fitzpatrick’s claims of intentional interference with a contract and intentional interference with a business relation. Ms. *9. The Court also submitted Margaret’s counterclaim seeking recovery of the funds withdrawn from the joint bank account. Ibid. The jury returned a verdict in favor of Fitzpatrick on her claims of tortious interference and in favor of Margaret on her counterclaim to recover the funds withdrawn from the bank accounts.

On Fitzpatrick’s appeal, the Court affirmed the dismissal of the breach of contract claim. Fitzpatrick argued that via the quitclaim deed from John to Margaret, Margaret was assigned John’s interest and assumed his obligations under the agreement with Fitzpatrick. The Court applied settled law that while there are no formal requirements for an assignment, “[t]here has been an assignment (1) if the assignor intended to transfer a present interest in the subject matter of the contract, and (2) if the assignor and the assignee mutually assented to the assignment.” Ms. *19, quoting Devenney v. Hill, 918 So. 2d 106, 113 (Ala. 2005) (internal citation omitted). The Court held that while the quitclaim deed assigned John’s ownership interest in the property to Margaret, it “did not assign John’s interest in the agreement to Margaret; [because] it makes no mention of the agreement.” Ms. *20.

As to the claims for intentional interference with a contract and with a business relation, the Court reversed and rendered judgment in favor of Margaret on those claims because “Fitzpatrick failed to prove that Margaret is a stranger to the agreement.” Ms. *31, citing Waddell & Reed, Inc. v. United Investors Life Insurance Co., 875 So. 2d 1143, 1153-54 (Ala. 2003). The Court rejected Fitzpatrick’s argument that the stranger defense was an affirmative defense waived by Margaret’s failure to plead it in her answer. Ms. *31.

The Court also considered and rejected Fitzpatrick’s claims of error arising from the circuit court’s denial of her several attempts to amend the pleadings after the deadline set by the pretrial order. The Court found no abuse of discretion but cited with approval Justice Lyons’s treatise observing “even though an amended pleading is filed after the cut-off date in a scheduling or pretrial order, the trial court must still have a valid reason for disallowing the amendment.” Ms. *24, quoting 1 Champ Lyons, Jr., and Ally Windsor Howell, Alabama Rules of Civil Procedure Annotated, Rule 16, § 16.5, p. 511 (4th ed. 2004). The Court also noted that vigorous enforcement of a pretrial order conflicts with the “preference for full justice on the merits rather than [] an interest in expedient disposition of lawsuits.” Ms. *24, quoting Alabama Rules of Civil Procedures Annotated, Rule 16, § 16.5, pp. 511-12.

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