Martin v. Scarborough, et al., [Ms. SC-2023-0904, Nov. 22, 2024] __ So. 3d __ (Ala. 2024). The Court (Bryan, J.; Parker, C.J., and Shaw, Stewart, and Mitchell, JJ., concur; Sellers, J., concurs in the result in part and dissents in part, which Wise and Mendheim, JJ., join; Cook, J., recuses) affirms in part and reverses in part the Lee Circuit Court’s summary judgment in an ejectment action.
In May 2008, Gary Martin obtained from BBVA a home-equity line of credit (“the HELOC”) with a maximum credit line of $50,000 which was secured by a mortgage on Martin’s home. Ms. *2. Subsequently, Attorney Joseph T. Scarborough, Jr. and Scarborough & Griggs, LLC (“S&G”) represented Martin in a divorce proceeding. In 2012, Martin executed a promissory note for the payment of legal fees and granted S&G a mortgage interest in the property as security for the promissory note. The attorney-client relationship between the Scarborough parties and Martin was terminated in June 2013. Following S&G’s dissolution, the note and mortgage were assigned to Scarborough in May 2018. Ms. **2-3.
BBVA conducted a foreclosure sale on June 28, 2019, and “Scarborough purchased the property at the foreclosure sale with a bid of $34,929.77, which was $1 more than the payoff amount for Martin’s HELOC balance.” Ms. *3.
In November 2019, Scarborough filed this ejectment action seeking possession and a declaration that Martin had forfeited his redemption right under § 6-5-251, Ala. Code 1975, by failing to vacate the property. Ms. *4. Martin asserted a number of counterclaims against the Scarborough parties and on June 30, 2021 also asserted various claims against BBVA. Ms. **4-5. The circuit court entered summary judgment for Scarborough on the ejectment claim and also dismissed Martin’s counterclaims against the Scarborough parties as time barred under the Alabama Legal Services Liability Act (“ALSLA”). The claims against BBVA were also dismissed as time barred. Ms. **5-6.
The Court first rejects Scarborough’s argument that the summary judgment was not a final judgment because it did not expressly grant him a right to possess the property. The Court explains “‘the right of immediate possession … is the gravamen of an ejectment action.’” Gholson v. Watson, 495 So. 2d 593, 597 (Ala. 1986)(citing § 6-6-280, Ala. Code 1975)… Consequently, when considering a judgment in favor of the plaintiffs regarding an action in the nature of ejectment, this Court has reasoned that, ‘although not expressly stated, implicit in the final judgment is the trial court’s determination that the plaintiffs were entitled to immediate possession of the real property in issue.’ Jones v. Regions Bank, 25 So. 3d 427, 440 (Ala. 2009).” Ms. *9.
In reversing the summary judgment on Scarborough’s ejectment claim, the Court reiterates that “‘irregularities in the foreclosure process that would render the foreclosure sale void may be raised as affirmative defenses to an ejectment action.’ Campbell v. Bank of America, N.A., 141 So. 3d 492, 500 (Ala. Civ. App. 2012). ‘[I]f the purchase price is so inadequate as to shock the conscience and raise a presumption of fraud, the inadequacy is a circumstance that may render the foreclosure sale void in Alabama.’ Id. at 499.” Ms. **12-13. The Court concludes “the [foreclosure] sale price in this case, which was approximately 16.6% of the property’s fair market value, constitutes substantial evidence creating a genuine issue of material fact regarding whether the foreclosure sale should be set aside as void.” Ms. **16-17.
In affirming the summary judgment dismissing Martin’s ALSLA counterclaims against the Scarborough parties, the Court concludes under either the occurrence or damage approaches to the accrual of legal malpractice claims “Martin’s counterclaims under the ALSLA accrued in 2012, not in 2019, according to his own allegations.” Ms. *25. Martin alternatively argued that the ALSLA limitations periods were inapplicable to his counterclaims against the Scarborough parties because his counterclaims were compulsory in Scarborough’s ejectment action against him. Ms. *26. The Scarborough parties cited persuasive out-of-state authority that the compulsory counterclaim recoupment/exception did not apply because Martin’s claims were barred by the ALSLA’s four-year statute of repose. Ms. **29-31. The Court declines to rule on this issue but rejects Martin’s argument because he failed to adequately develop it. Ms. *31.
In affirming the summary judgment dismissing Martin’s counterclaims against BBVA, the Court notes that “BBVA’s alleged breach of contract in this regard [allowing unauthorized withdrawals under the HELOC] had occurred in 2009. … Therefore, the 10-year limitations period for bringing a breach-of-contract action regarding such draws expired in 2019, thereby rendering Martin’s June 30, 2021, amended pleading naming BBVA as a counterclaim defendant untimely.” Ms. *33.