ALABAMA – Dispositive Motions – Procedure

The Supreme Court has reviewed the dissolution of a law firm in Mobile, and clarified the hearing requirements related thereto. The law firm was established in 1994, until one of the partners, Zieman, withdrew in 2014. Zieman, Speegle, and Hoffman were the equity-holding members of the firm.  Speegle and Hoffman filed a petition for approval of dissolution of the firm, whereupon the trial court entered an order stating the firm was deemed dissolved. The court further authorized Speegle and Hoffman to wind up the business of the firm, and provided a deadline before which members of the firm could object to the dissolution. In 2015, Zieman filed a motion for accounting of the law firm’s funds, and submitted discovery to the firm regarding its former clients. In 2016, Hoffman and Speegle moved the court to approve the payouts of firm assets to its former members, and Zieman objected, requesting a neutral third to wind up the firm’s affairs, and argued that the accounting of the firm’s ongoing business at the time of dissolution was insufficient, and further claimed the firm had been engaging in minority shareholder oppression. Hoffman and Speegle moved to dismiss this claim, and the court entered a scheduling order which determined it would rule on Hoffman and Speegle’s motion without holding a hearing. Without holding a hearing, the motion to dismiss was granted, and Hoffman and Speegle’s disbursement of assets was approved.

The Supreme Court found that, because the trial court considered evidence outside the pleadings in ruling on Hoffman and Speegle’s motion to dismiss, it should have more properly been characterized as a motion for summary judgment, which requires all parties receive opportunity to present material pertinent to the motion. Zieman pointed out that both rules of procedure 56 and 78 required a hearing explicitly. The consideration of matters outside the pleadings entitled Zieman to a hearing pursuant to ARCP 56, while ARCP 78 prohibits granting motions for final judgment without opportunity for oral hearing.

Zieman v. Zieman Speegle, LLC,   (September 20, 2019).


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