Ivy Fund Manager, LLC v. CDH Real Est. Inv. Mgmt. Co., No. SC-2025-0799, 2026 WL 2451497 (Ala. 2026). The Court (Mendheim, J.; Stewart, C.J., and Shaw, Bryan, and McCool, JJ., concur) dismisses Ivy’s appeal from the Lee Circuit Court, holding that a default judgment reserving the issue of damages is interlocutory and not immediately appealable, even where the circuit court also rules that a pending motion to compel arbitration is moot. Id. at *1, *11.
CDH and Ivy entered into a joint venture to own, develop, and operate a mixed-use residential property near Auburn University. Id. at *1. CDH alleged that Ivy used its access to the joint venture’s bank accounts to make unauthorized transfers to separate Ivy accounts, stole more than $1 million, and still owed $935,000 when CDH filed suit for declaratory judgment, fraudulent misrepresentation, conversion, and fraudulent suppression. Id.
After Ivy failed to timely respond to the complaint, CDH filed an application for entry of default and a motion for default judgment. Id. at *1–2. Ivy answered one day before the hearing on CDH’s first default-judgment motion, did not raise arbitration as an affirmative defense, and represented that it was willing to move forward with litigation if settlement negotiations failed. Id. at *2. The circuit court denied CDH’s first default-judgment motion, and the parties proceeded with discovery under a scheduling order. Id. at *2–3.
CDH later filed a second motion for default judgment after Ivy’s CEO and corporate representative failed to appear for noticed depositions and after Ivy allegedly provided obfuscating and nonresponsive discovery responses. Id. at *3–4. After a hearing on that motion, the circuit court ordered the parties to agree on a date for the disputed depositions. Id. at *4. CDH then filed a renewed motion for default judgment after Ivy’s representative again failed to appear for a re-noticed deposition on a date Ivy’s counsel had agreed to. Id. at *4–5. Ivy responded that the deponent could not travel because his visa application had been denied, but CDH submitted evidence that his visa had actually been issued before the scheduled deposition. Id. at *5. Ivy then moved to compel arbitration and stay the proceedings. Id. at *5–6.
The circuit court granted CDH’s renewed motion for default judgment based on Ivy’s litigation conduct and reserved the issue of damages for a later hearing. Id. at *6. In the same order, the circuit court stated that, because default judgment had been entered, Ivy’s pending motion to compel arbitration was moot. Id. Ivy appealed, arguing that the mootness ruling was effectively a denial of its motion to compel arbitration and was immediately appealable under Rule 4(d), Ala. R. App. P. Id. at *7.
The Court disagrees, explaining that Rule 4(d) applies to orders granting or denying motions to compel arbitration, not to an interlocutory default judgment that renders a motion to compel arbitration moot. Id. at *7, *11. The Court emphasizes that arbitration agreements are enforceable like other contracts, but arbitration does not receive special procedural status that overrides ordinary rules governing final judgments and default judgments. Id. at *9, *11.
The Court reasons that the circuit court entered default based on Ivy’s alleged litigation misconduct not based on the merits of Ivy’s arbitration argument. Id. at *10–11. Because the default judgment reserved damages, it remained interlocutory, and Ivy could not appeal until the circuit court assessed damages and entered a final judgment. Id. at *7, *11. The Court dismisses the appeal. Id. at *11.