Jean S. Gray v. Larry O. Bain and Sharon Johnston ( 2014 )

REL: 09/26/2014
Notice: This opinion is subject to formal revision before publication in the advance
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the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
____________________
1130378
____________________
Jean S. Gray
v.
Larry O. Bain and Sharon Johnston
Appeal from Elmore Circuit Court
(CV-99-0238)
MURDOCK, Justice.
Jean S. Gray appeals from two orders of the Elmore
Circuit Court in an action filed against Larry O. Bain and
Sharon Johnston in which Gray sought a judgment declaring that
she owned a parcel of land (hereinafter "the parcel") and an
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injunction preventing Bain and Johnston from asserting any
rights to the parcel. We conclude that the trial court erred
in granting a Rule 60(b), Ala. R. Civ. P., motion filed by
Bain and Johnston that set aside a settlement of the action.
I. Facts and Procedural History
This action has been appealed twice before. In Bain v.
Gray, 835 So. 2d 1034 (Ala. Civ. App. 2002) ("Bain I"), the
Court of Civil Appeals summarized the pertinent underlying
facts of the dispute between the parties.
"The .05-acre parcel in dispute is located in
the Kowaliga Bay Estates subdivision in Elmore
County. The record indicates that the parcel is a
rocky, narrow strip of land that slopes steeply down
on its west side into a slough on Lake Martin. The
parcel is bordered to the east by Big Oak Drive, to
the north by Cove Drive, and to the south by Poplar
Drive.
"The record contains a copy of the original
subdivision plat filed in September 1953. The
subdivision plat divides the property composing the
subdivision into units, then into blocks, and then
into lots. From our review of the record, it
appears that all of the smallest divisions of the
property in the subdivision plat are designated by
lot numbers, with the exception of the disputed
parcel. However, on the subdivision plat, three
lines are drawn across the parcel. The record
indicates that those lines, if continued across Big
Oak Drive, match the lines dividing Lots 2, 3, and
4, of Block No. 5, Unit No. 2, of the Kowaliga Bay
Estates subdivision.
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"Gray owns Lots 2, 3, and 4, of Block No. 5,
Unit No. 2, of the Kowaliga Bay Estates subdivision,
the lots directly across Big Oak Drive from the
parcel. [Bain and Johnston] own Lot 13 and Lot 14
of Block 8, Unit 2, of the Kowaliga Bay Estates
subdivision. One of [Bain and Johnston's] lots is
directly across the slough from the parcel. The
parties' deeds describe their respective properties
by lot, block, and unit numbers; all of the deeds
preceding those deeds date back to the time the
subdivision plat was recorded, and describe the
properties by lot, block, and unit numbers. None of
the deeds to the parties' properties contain a
metes-and-bounds description, and none of the deeds
reference or describe the parcel."
835 So. 2d at 1035-36.
On June 9, 1999, Gray and her husband Burl A. Gray filed
this action asking seeking declaratory and injunctive relief
concerning ownership of the parcel.1 Bain and Johnston
answered and filed a counterclaim also seeking declaratory and
injunctive relief concerning ownership of the parcel.
"On September 28, 2000, [Bain and Johnston]
filed a motion for a summary judgment. On
December 22, 2000, Jean Gray filed a motion for a
summary judgment and a brief in support of that
motion. The trial court held a hearing on both
parties' summary-judgment motions. On May 4, 2001,
the trial court denied the parties' summary-judgment
motions and issued an order dividing the parcel
between the parties. [Bain and Johnston] filed a
motion to alter, amend, or vacate the trial court's
1
Burl Gray died on August 27, 1999. Jean Gray moved to
have him dismissed as a party, and the trial court granted
that motion.
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May 4, 2001, order; that motion was denied by
operation of law. [Bain and Johnston] appealed to
the Supreme Court of Alabama; Gray cross-appealed.
The Supreme Court of Alabama transferred the appeals
to [the Court of Civil Appeals] pursuant to
§ 12-2-7(6), Ala. Code 1975."
835 So. 2d at 1035.
In Bain I, the Court of Civil Appeals explained that the
trial court had divided the parcel between the parties after
concluding that the original intent of the subdivision
developers was ambiguous. The Court of Civil Appeals
concluded that the trial court had erred in dividing the
parcel at the summary-judgment stage, because, it held, "if
the trial court determines that the deed is ambiguous, the
intent of the grantor becomes a factual issue," and "[w]hen a
genuine issue of material fact exists regarding the intent of
the grantor in the deed, a summary judgment is not
appropriate." 835 So. 2d at 1038. The Court of Civil Appeals
also noted that "the trial court erred in dividing the parcel
in a manner inconsistent with the parties' assertions and
unsupported by the evidence presented by the parties at the
hearing on the parties' summary-judgment motions." Id.
Accordingly, the Court of Civil Appeals reversed the trial
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court's judgment and remanded the cause for further
proceedings.
For reasons not fully explained by the parties, nothing
further occurred in this action for several years.2 On August
19, 2011, following the retirement of presiding Judge John
Rochester, this case was assigned to Judge Sibley Reynolds.
Following several continuances, the trial court set the case
for a May 30, 2012, trial date.
On May 30, 2012, with all parties present, a settlement
agreement was reached during a recess in the proceedings. The
terms of the settlement were read into the record by Gray's
attorney. As the terms were read, the parties and their
attorneys interjected to seek clarification on certain points.
One such interjection was made by Bain and Johnston's counsel,
who stated:
"MR. HAYNES: Judge, on the very first paragraph.
Bob, you said this earlier but did not recite it
then. I believe it's an oversight or I didn't hear
it. We believe that the waterfront that Ms. Gray
would get would be more or less approximately
eighty-seven feet, but that specific number is not
controlling. It is the points that he referred to
going through the delta points.
2
The parties do indicate that attempts to settle the
dispute were made during this period.
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"THE COURT: That will be established by the Speaks
survey.
"MR. HAYNES: Correct.
"MR. RENEAU [Gray's counsel]: He's right. That's
in my notes and I neglected to say it."
(Emphasis added.) After several such exchanges between the
parties, their attorneys, and the trial court, the trial court
asked Bain and Johnston's attorney:
"Do we have an agreement?
MR. HAYNES: Yes, sir.
"THE COURT: Ms. Gray, is that your understanding of
the agreement?
"MS. GRAY: I wish you could see the pictures of
what is built over there.
"THE COURT: Ms. Gray, if I start taking testimony,
I'm not going to look. Is that your understanding
of the agreement?
"MS. GRAY: Yes.
"THE COURT: Is that your agreement?
"MS, GRAY: Yes.
"THE COURT: Mr. Bain, is that your understanding of
the agreement?
"MR. BAIN: Yes, sir.
"THE COURT: Is that your agreement?
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MR. BAIN: The only problem I have is when we agreed
in the back room to what their first offer was about
the property lines going across from three and going
down to, what was that point, delta point four, we
agreed to that. We didn't really agree to come over
a foot and out a foot and do that. We agreed to
what they offered. You know, we have been trying to
settle this for a long, long time, thirteen years.
You know, just to have to change it after we walk
out here, we're not really happy.
"THE COURT: Mr. Bain, we're five minutes from that.
That's what I was asking. Is that your
understanding of the agreement?
"MR. BAIN: Yes, sir.
"THE COURT: Is that your agreement?
"MR. BAIN: Yes, sir.
"THE COURT: Ms. Johnston, is that your
understanding of the agreement?
"MS. JOHNSTON: Yes, sir.
"THE COURT: Is that your agreement?
"MS. JOHNSTON: Uh-huh (positive response).
"THE COURT: Thank you, I will enter that order just
as soon as it's presented. ..."
On June 12, 2012, the trial court entered an order based
on the terms of the settlement. In pertinent part, the order
provided:
"1. The parties will divide absolute ownership of
the disputed property with the Plaintiff, Jean S.
Gray (hereinafter referred to as 'Gray') receiving
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the northern portion of the disputed property (which
has been labeled as Parcel 57 by the Elmore County
Revenue Commissioner's Office) and the Defendants,
Larry O. Bain and Sharon Johnston (hereinafter
referred to as 'Bain and Johnston') receiving the
southern portion of same. [Bain and Johnston's]
surveyor, Stephen Speaks, shall at [Bain and
Johnston's] expense, prepare a boundary survey of
the parcels to be received by the respective
parties. Said survey shall be in accordance with a
survey previously prepared by Speaks with the
addition of the boundary line which will now divide
the property into the two parcels to be received by
the respective parties. The common boundary line
shall begin on the west side of Big Oak Drive at the
point which would represent the boundary line
between Lot 3 and Lot 4, Block 5, Unit 2 of Kowaliga
Bay Estates. Beginning at said point, the boundary
line shall proceed to a point which is one foot from
the point designated as the Delta Point between L-4
and L-5 on the previous Speaks survey. Said point
shall be determined in a manner which will cause the
remainder of the boundary line which intersects said
Delta Point to be perpendicular to Big Oak Drive.
The express purpose of the above is to cause the
property line to enter Lake Martin at an angle
perpendicular to Big Oak Drive.
"2. Upon completion of the new Speaks survey set
forth in the proceeding paragraph, the parties shall
exchange Quitclaim Deeds wherein each party
relinquishes any and all claim of interest in the
property to be received by the opposing party. Each
party, at its own expense, shall record their Quit-
claim Deed in the Office of the Judge of Probate of
Elmore County, Alabama, within seven days of the
receipt of same, and immediately thereafter shall
deliver a recorded copy of said Quitclaim Deed to
the Elmore Revenue Commissioner's Office so that the
property may be appropriately assessed for
ad valorem tax purposes in the future.
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"3. The Court hereby orders the Elmore Revenue
Commissioner's Office to terminate, beginning with
the next ad valorem tax year, its assessment of the
disputed property as Parcel 57 (which the parties
currently have double assessed), and immediately
thereafter to begin assessing the property to the
respective parties in accordance with the
descriptions set for in said Quitclaim Deeds
referenced above.
"4. Bain and Johnston will not oppose, publicly or
privately, any attempt by Gray to vacate Cove Drive
west of its intersection with Big Oak Drive (the
same lying between Lots 1 and 2, Block 5, Unit 2 of
Kowaliga Bay Estates).
"5. Bain and Johnston will not oppose Gray's efforts
to obtain the appropriate license or permit from
Alabama Power Company to build a dock or a pier,
including a ramp or stairway to said dock/pier
abutting the property described in her Quitclaim
Deed, nor will they oppose the construction of same.
Likewise, Gray will not oppose the
licensing/permitting or construction of a pier/dock
by Bain and Johnston abutting the property described
in their Quitclaim Deed. Any pier/dock to be
constructed by either party must be done in
accordance with the applicable regulations of
Alabama Power Company.
"6. Bain and Johnston shall have the right, but not
the obligation, to maintain the seawall which they
previously built on property described in Gray's
Quitclaim Deed. Bain and Johnston, however, shall
not have the right to change or increase the height
of said seawall without first obtaining written
permission from Gray to do so.
"7. Neither party may construct any structure or
improvements on the property described in their
respective Quitclaim Deeds, other than as set forth
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above, without first obtaining the written consent
of the other party.
"8. Neither party shall in any way intentionally
harass or annoy the other party or create a nuisance
on the property described in their respective Quit-
claim Deeds.
"9. The terms of this Order shall be appurtenant to
and shall run with the land so as to be binding on
the successors, assignees or heirs of the respective
parties.
"10. A separate Order to Revenue Commissioner will
be signed by the Court concurrently herewith. Said
order to Revenue Commissioner shall be delivered to
the Revenue Commissioner's Office and further, a
copy of same shall be recorded in the records
maintained in the Elmore Probate Office so as to
provide appropriate notice of the terms of same."
(Emphasis added.) As the settlement agreement provided, the
trial court also executed on June 12, 2012, an order directed
to the Elmore Revenue Commissioner's office, ordering that
office to begin assessing the parcel in accordance with the
quitclaim deeds it would receive describing the two segments
of the parcel.
According to Bain and Johnston, after the survey work
began on the parcel, it became clear to them that the boundary
line described in the settlement agreement was not the
boundary line they thought they were agreeing to. Bain and
Johnston "believed that the boundary line between Lots 4 and
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5 started at the end of the seawall they built on the Big Oak
side of the slough. Instead, the point was closer to the
creek end of the slough then they had anticipated."
On July 24, 2012, Bain and Johnston filed a "Motion for
Relief from Judgment" pursuant to Rule 60(b), Ala. R. Civ. P.
In pertinent part, the motion asserted:
"[A] mistake was made when [Bain and Johnston]
'agreed' to a settlement prior to the commencement
of the trial. [Bain and Johnston] telephoned Jim
Bain, an employee of their business who is also the
brother of Larry Bain, and asked him to go and
determine where the property boundary line would be
if they proposed settlement were accepted.
Unfortunately, Jim Bain mistakenly 'located' the
boundary line and called back explaining where he
thought the line would be situated between [Gray]
and [Bain and Johnston]. Jim Bain's understanding
was erroneous and his description of where the line
would be was off by several feet such that [Bain and
Johnston] would never have agreed to the proposed
settlement. [Bain and Johnston's] understanding of
the settlement at the time the settlement was made,
based on what they were mistakenly informed by Jim
Bain, was simply wrong."
On July 25, 2012, Gray filed a response in opposition to
the "Motion for Relief from Judgment." In her response, Gray
noted that the settlement had occurred "[a]fter more than
three (3) hours of negotiation." Gray further observed that,
"[w]hile counsel were reading their agreement into
the record in the presence of the Court, several
disagreements arose, which ultimately were resolved
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with input from the Court. The final agreement to
the settlement read into the record was delayed over
the lunch break at the request of [Bain and
Johnston] so that they could have an employee plot
the exact location of the boundary line to which the
parties were agreeing."
Gray argued that relief under Rule 60(b) "is an extraordinary
remedy that is not to be used for the purpose of relieving a
party from the effects of a free and voluntary consent
judgment."
On September 26, 2012, the trial court held a hearing on
Bain and Johnston's Rule 60(b) motion. The trial court took
testimony from witnesses as to whether Bain and Johnston were
mistaken as to the actual boundary line dividing the parcel
when they agreed to the settlement on May 30, 2012.
Jim Bain testified that on May 30, 2012, his brother
Larry called him while Jim was at lunch and asked him to drive
out to the parcel and to measure the distance from one point
to another. Specifically,
"[Larry Bain] explained to me that he was concerned
about where a certain distance would hit on the
shoreline. He asked me to go to his house and
across the waterway and measure from a boathouse
building back in a, I guess that would be a,
southerly direction and tell him where that distance
hit. There is a big rock and a bench that was built
out of stone that he wanted to know how far away
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from that boathouse it was. And I give him that
information."
Jim Bain explained that the distance from the boathouse to the
"big rock" was 83 feet, or 85 feet to the center of the rock
because it is "a wide rock." He testified that he related
this information to his brother and that he also sent some
pictures using his cellular telephone. Jim Bain stated that
he simply measured the distance between two points that were
given to him by Larry Bain in that telephone conversation.
Larry Bain next testified as to what he asked his brother
Jim to measure.
"A. I asked him to go to what we thought was the
property line, which was next to their
boathouse, where we built a seawall already and
measure over eighty-three feet because those
were numbers that were being given to us, you
know, on some sort of split of the property.
That's what he told us. The seawall --
"Q. Just answer the question. What was your
understanding as to the significance of the
eighty-three feet as you negotiated the
settlement of your case for this property?
"A. Well, that's where he told us where that big
rock was, so we felt like we could agree on
some sort of division right in there."
Bain asserted that the reason it was important for the
boundary line to be where he thought it was as opposed to what
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was described in the settlement agreement was that the latter
boundary line would allow Gray to build a pier that could
block Bain and Johnston's access to the water for loading and
unloading equipment in their business.
On cross-examination, Bain was asked who made the mistake
at issue, and he responded: "I'm going to have to say it was
my mistake, my total mistake because that is where I was
assuming the property line was, was next to that boathouse."
He was then asked about what he heard on the day the
settlement agreement was read into the record.
"Q. Now, when we were in court before Judge
Reynolds and we read the common boundary line
shall begin at the west side of Big Oak Drive
at a point which will represent the boundary
line between lot three and lot four of block
five unit two of Kowaliga Bay Estates, you
understood where that was, didn't you?
"A. No, sir, I didn't understand where it was
because I couldn't see it on a map. I mean,
you know, I couldn't see it -- where it was in
adjacent to the land. That is why we had
somebody go out and try to give us an idea of
where that position was.
"Q. Well, you understood where it was on the survey
we were looking at that day, didn't you?
"A. Well, I'm not a surveyor, but I could see it on
the survey. That never told me where it was on
the property --
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"Q. All right.
"A. -- as I was looking from my house, no, sir.
"Q. But you knew that that was the starting point
of this boundary line that we were agreeing to?
"A. Yes. I believe that is what y'all were saying
was the starting line.
"Q. Then we said beginning at this point the
boundary line shall proceed to a point which is
one foot from the point designated at the delta
point between L-4 and L-5 on the previous
Speaks survey. And you heard that, didn't you?
"A. I did hear that.
"Q. And you were able to look at the Speaks survey
and see where that point was?
"A. I think you threw that out there after -- that
little angle you put on there was not on the
survey. That you changed the angle on, I don't
think that was there.
"Q. But the delta point didn't change is what I'm
saying?
"A. That's right.
"Q. You knew where that delta point was?
"A. I could see it on the survey, yes, sir.
"Q. So you knew that it was from that point between
lot three and four on the west side of Big Oak
Drive to that delta point?
"A. I knew it was somewhere in between there, yes,
sir.
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"Q. Then we said, said point shall be determined in
a manner which will cause the remainder of the
boundary line which intersects the delta point
to be perpendicular to Big Oak Drive. I left
out the part where I said it should be one foot
from the delta point. So you knew that day
that the line was going to be perpendicular to
Big Oak Drive extending into the lake, didn't
you?
"A. Yes, sir.
"Q. You didn't say anything to anybody that day
about, wait a minute, I told my brother to
measure eighty-three feet and it is not the
same?
"A. No, because we felt like that would have been a
fair split on the property where he told us the
eighty-three feet was. We felt like we could
live with that.
"Q. But you knew when the settlement was being read
into the Court that day that there was no
mention of eighty-three feet?
"A. Well, that was just what we were being told. It
was going to be eighty-three -- seven feet
dispute, but that is not even what that is on
that survey.
"Q. Well, Mr. Bain, listen to me. That may have
been what your lawyers told you, but that is
not what was discussed in open court with Judge
Reynolds for the agreement, was it?
"A. No, sir."
Sharon Johnston also testified as to where she believed
they were agreeing that the boundary line would be located,
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echoing Bain's understanding. On cross-examination, Johnston
was asked if, at the time the settlement agreement was read
into the record, she understood the location of the boundary
line that was being described. She responded:
"We're trying to imagine eighty-three feet and where
it is in relation to the bench and the rock and that
sort of thing because we know that property. So
that is why we asked someone to go out there. So
no, I didn't understand to the degree that you are
saying. This was a map that was sitting by itself
with no trees, no rocks, no seawall, nothing. So we
could not visualize where this actually was going to
be. ... So without seeing this actual survey, we
could not make a rationale decision."
Gray's attorney further explored Johnston's understanding at
the time the settlement agreement was made:
"Q. ... You understood on May 30th when we were in
here and when you made the agreement that the
boundary line as it extended into the lake was
going to be perpendicular to Big Oak Drive,
didn't you?
"A. Yes.
"Q. That didn't concern you that day?
"A. I saw it in a different direction.
"Q. Okay. Are you claiming that anything was said
in open court in the presence of Judge Reynolds
about eighty-three feet?
"A. That was the basis on all [sic] judgment on our
agreement.
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"Q. But there was no way for us to know that or for
the Court to know that.
"A. Well, you mentioned seven feet. There was a
seven foot difference. We agreed to give them
seven more feet. Then you added the one foot
diversion.
"Q. All right.
"A. At the very end.
"Q. I don't recall mentioning seven feet. I recall
mentioning exactly what is in the order that it
was going to be from the boundary line up here
on Big Oak Drive to the delta point. Isn't
that right?
"A. That's correct."
The last witness in the hearing was Jean Gray. Gray
testified that she understood the line described in the
settlement agreement to be the line the parties had agreed to
on May 30, 2012, for dividing the parcel into two segments and
that the agreement was reflected in the order executed by the
trial court on June 12, 2012. On cross-examination, Gray was
asked whether she knew what Bain and Johnston "thought or
believed on May 30" that they were agreeing to, and Gray
admitted she did not know their thoughts.
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On September 26, 2012, the trial court entered an order
granting Bain and Johnston's Rule 60(b) motion; that order
stated, in pertinent part:
"Testimony being taken on the record on the
issue of mistake as to the location of certain
points along the waterfront and locations within a
certain plat map.
"Order of June 12, 2012, is set aside as [Bain
and Johnston] having made mistakes in their
understanding of certain locations of points.
"Case is reset for February 26, and February 27,
2013, at 9:00 a.m. for both days of trial."
On October 8, 2012, Gray filed a "Motion for
Reconsideration" of the trial court's September 26, 2012,
order. In the motion, Gray argued, among other points, that
the trial court had erred based on the testimony presented in
the September 26, 2012, hearing and that the ruling improperly
undermined the parties' confirmation of their understanding of
the settlement during the May 30, 2012, hearing. Gray
recounted that the reason the parties agreed on the delta
point as the reference point for dividing the parcel at the
shoreline was because "it was impractical, if not impossible,
to make an exact determination" of the footage of shoreline
that would be received by each party "due to the meandering
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nature of the shoreline." Gray noted that the delta point had
not moved and that it was easily located by Speaks for the
surveys he performed. Gray argued that Bain and Johnston
"heard that the terms of the settlement to which
they agreed mandated that the location of the
boundary line as it entered Lake Martin would be
determined solely by reference to the Delta Point
and with no consideration being given to shoreline
footage. If Bain and Johnston wanted to confirm the
actual shoreline footage involved with the common
boundary line as mandated by reference to an
unambiguous Delta Point, they should have advised
the Court that they were not prepared to accept the
terms of the settlement at that time. Obviously
they did not do so. Based upon the testimony
presented by [Bain and Johnston] at the
September 26, 2012, hearing, we now know that Bain
and Johnston simply attempted to approximate the
location of the proposed boundary line based solely
upon information which was not discussed in open
court and which was not part of the settlement
agreement or the Court's June 12, 2012, order. Gray
would respectfully suggest that a 'mistake' about a
fact which was not discussed in open court and which
was not part of the agreement to which the parties
assented in open court is not the type of mistake
for which Rule 60(b) relief is available."
Bain and Johnston did not file a response to Gray's motion.
On October 9, 2012, the trial court denied Gray's "Motion
for Reconsideration." On October 31, 2012, Gray appealed the
trial court's disposition of Bain and Johnston's Rule 60(b)
motion to this Court. We transferred the appeal to the Court
of Civil Appeals. On May 22, 2013, the Court of Civil Appeals
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dismissed Gray's appeal as being from a nonfinal judgment.3
Gray v. Bain (No. 2120406, May 22, 2013), ___ So. 3d ___ (Ala.
Civ. App. 2013) (table).
A trial on the merits was conducted on September 19 and
20, 2013. Following trial and the submission of arguments by
both sides, the trial court entered an order on November 19,
2013. In that order, the trial court concluded that the
original plat was ambiguous as to the ownership of the parcel
and that Bain and Johnston "have a chain of title for over
thirty years, color of title, possession, tax payment and
deeds with generalized descriptions and testimony that
factually places title in them." Accordingly, the trial court
concluded that fee-simple title to the parcel was to be vested
3
This Court has held that "[a]n order granting a motion
seeking relief from a judgment under Rule 60(b), Ala. R. Civ.
P., is generally considered an interlocutory order because
further proceedings are contemplated by the trial court;
therefore, such an order is not appealable." Ex parte
Overton, 985 So. 2d 423, 424 (Ala. 2007). This Court also has
stated that "'[a] petition for the writ of mandamus is a
proper method for attacking the grant of a Rule 60(b)
motion.'" Ex parte Wallace, Jordan, Ratliff & Brandt, L.L.C.,
29 So. 3d 175, 177 (Ala. 2009) (quoting Ex parte A&B Transp.,
Inc., 8 So. 3d 924, 931 (Ala. 2007)). Gray did not file a
petition for a writ of mandamus, and the Court of Civil
Appeals apparently chose not to treat her appeal as such a
petition; it therefore dismissed Gray's appeal as being from
a nonfinal judgment.
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in Bain and Johnston. The trial court also concluded that
"the original intent of the developers was to attach the
disputed real estate to the lot owners so as to give the
possessor of the end of the slough the use of both side[s],
given the disputed area had no development/usable value."
On December 19, 2013, Gray appealed to the Court of Civil
Appeals the trial court's September 26, 2012, order granting
Bain and Johnston's Rule 60(b) motion and the trial court's
November 19, 2013, order awarding title to the parcel to Bain
and Johnston. On December 27, 2013, the Court of Civil
Appeals transferred Gray's appeal to this Court due to a lack
of subject-matter jurisdiction in that court.
II. Standard of Review
This Court has held that the decision whether to grant or
deny a motion made pursuant to Rule 60(b) is "within the sound
discretion of the trial judge, and the appellate standard of
review is whether the trial court abused its discretion."
Ex parte Dowling, 477 So. 2d 400, 402 (Ala. 1985).
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III. Analysis
We begin by examining the trial court's September 26,
2012, order granting Bain and Johnston's Rule 60(b) motion
because a ruling in Gray's favor as to that order would
require reinstatement of the settlement agreement and
necessarily moot examination of the trial court's November 19,
2013, order on the merits of ownership of the parcel. Gray
makes several arguments regarding the order granting Bain and
Johnston's Rule 60(b) motion, but the one we focus on is
Gray's assertion that
"[a]ny fair reading of the record, when putting
things in the light most favorable to Bain and
Johnston, would simply indicate that because Bain
and Johnston attempted to approximate the location
of the negotiated common boundary line by means not
authorized under the terms of the settlement, they
thought that the common boundary line would be
located a few feet further north than actually was
the case."
Gray contends that Bain and Johnston's "mistake" was actually
a free and deliberate choice they made for which Rule 60(b) is
not intended to provide them relief. See, e.g., Ex parte
Mealing, [Ms. 2120973, Oct. 25, 2013] ___ So. 3d ___, ___
(Ala. Civ. App. 2013) (stating that "Rule 60(b) is not
designed to relieve a party from the deliberate choices he or
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she has made"); Murphy v. Golden Poultry Co., 634 So. 2d 1027,
1029 (Ala. Civ. App. 1994) (noting that "[i]t is not the
intent of Rule 60(b) to relieve a party from the free,
calculated, and deliberate choices he/she has made").
Bain and Johnston answer this argument by contending that
they demonstrated through testimony at the September 26, 2012,
hearing that at the time they assented to the settlement
agreement they simply made a mistake as to where the boundary
line dividing the parcel between the parties would be located
and that they never would have agreed to the boundary line
described in the settlement agreement had they understood its
actual location at that time. Bain and Johnston assert that
they established the existence of a mistake that entitled them
to relief under Rule 60(b).
Even if Bain and Johnston made an honest mistake, the
evidence and arguments are unequivocal that they alone made
the mistake. Bain repeatedly testified that the mistake at
issue was his mistake. Johnston testified that she shared
Bain's understanding of the boundary line. There is no
suggestion that Gray did not understand where the boundary
line would be located at the time the parties reached the
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settlement, and, in fact, her undisputed testimony confirmed
that she understood the terms of the agreement. Thus, the
undisputed evidence is that the mistake at issue was a
unilateral mistake on the part of Bain and Johnston.
The trial court appears to have incorrectly assumed -- as
do Bain and Johnston -- that any mistake as to a material fact
of the settlement agreement justified its rescission.
"Rule 60(b)(1)[, Fed. R. Civ. P.,] authorizes the court to
give relief from a judgment, order, or proceeding for
'mistake, inadvertence, surprise, or excusable neglect,'" but
"judgments entered as a result of settlements may be reopened
[only] when fraud or mutual mistake is shown." 11 Charles
Alan Wright, Arthur K. Miller & Mary Kay Kane, Federal
Practice & Procedure § 2858 (2012).4 The reason for this is
that, although a mutual mistake of fact will permit a court to
reform or rescind a binding settlement agreement, a unilateral
mistake does not justify such relief. "Unilateral mistakes do
4
"Because the Federal Rules of Civil Procedure were used
as a model for Alabama's procedural rules, these 'federal
decisions are highly persuasive when we are called upon to
construe the Alabama Rules.'" Ex parte Full Circle Distrib.,
L.L.C., 883 So. 2d 638, 643 (Ala. 2003) (quoting City of
Birmingham v. City of Fairfield, 396 So. 2d 692, 696 (Ala.
1981)).
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not support reformation (absent some fraud or
misrepresentation). Moreover, one party is not customarily
charged to know what is on the other party's mind, so as to
concoct some constructive mutual mistake where there is but a
unilateral mistake." 27 Richard A. Lord, Williston on
Contracts § 70:109 (4th ed. 2003). "As a general rule,
rescission is unavailable where a unilateral mistake is
unknown to the other party (even though that mistake relates
to a basic assumption of a contract and has a material effect
on the agreed exchange of performances)." Williston at
§ 70:111. This Court has explained:
"We have often had occasion to point out the
grounds on which a court of equity will assume
jurisdiction to reform written instruments. 'First,
where there is a mutual mistake, that is, where
there has been a meeting of minds, an agreement
actually entered into, but the contract, deed,
settlement, or other instrument, in its written
form, does not express what was really intended by
the parties thereto; and, second, where there has
been a mistake of one party, accompanied by fraud or
other inequitable conduct of the remaining parties;'
and also where there has been a mistake on the part
of the scrivener. Of course the mistake must be
unmixed with negligence on the part of the party
seeking relief."
Ballentine v. Bradley, 236 Ala. 326, 328, 182 So. 399, 400-01
(1938). There was no allegation that Bain and Johnston's
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mistake was accompanied by fraud or other inequitable conduct
on Gray's part. See also Hackney v. First Alabama Bank, 555
So. 2d 97, 101 (Ala. 1989) (citing the Restatement (Second) of
Contracts §§ 153 and 154 (1979), and holding that, unlike a
mutual mistake of fact, a unilateral mistake will not serve as
a basis for avoiding the contract unless the effect of the
mistake is such that enforcement of the contract would be
unconscionable or the nonmistaken party had reason to know of
the mistake or his or her fault caused it). Meyer v. Meyer,
952 So. 2d 384, 391-92 (Ala. Civ. App. 2006) (declining to
authorize reformation or rescission of a contract as the
result of a mistake that the court concluded was not a "mutual
mistake" and relying on § 8-1-2, Ala. Code 1975, which
provides as follows: "When, through fraud, a mutual mistake
of the parties or a mistake of one party which the other at
the time knew or suspected, a written contract does not truly
express the intention of the parties, it may be revised by a
court on the application of the party aggrieved so as to
express that intention, so far as it can be done without
prejudice to the rights acquired by third persons in good
faith and for value.").
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Federal authorities also concur that only a mutual
mistake, and not a unilateral one, permits a court to rescind
or reform a binding settlement agreement.
"In the instant case, ... the district court
erroneously concluded that since a mutual mistake of
material fact would suffice to warrant reformation
of a settlement agreement, a unilateral mistake also
constituted permissible reason to do so. Existing
precedent, however, dictates that only the existence
of fraud or mutual mistake can justify reopening an
otherwise valid settlement agreement. 'One who
attacks a settlement must bear the burden of showing
that the contract he had made is tainted with
invalidity, either by fraud practiced upon him or by
a mutual mistake under which both parties acted.'
Callen v. Pennsylvania R.R. Co., 332 U.S. 625, 630,
68 S. Ct. 296, 298, 92 L. Ed. 242 (1948) (emphasis
added); Asberry v. United States Postal Serv., 692
F.2d 1378, 1380 (Fed. Cir. 1982) (same).
"'If a mistake was made in the present
case, it was made by the defendant alone.
Unlike a mutual mistake, a unilateral
mistake is not sufficient to allow the
mistaken party to limit or avoid the effect
of an otherwise valid settlement agreement.
Kline v. Florida Airlines, Inc., 496 F.2d
919, 920 (5th Cir. 1974); United States v.
Bissett-Berman Corp., 481 F.2d 764, 768
(9th Cir. 1973); Virginia Impression Prod.
Co. v. SCM Corp., 448 F.2d 262, 265 (4th
Cir. 1971)[, cert. denied, 405 U.S. 936, 92
S. Ct. 945, 30 L. Ed. 2d 811 (1971)].'
"Cheyenne-Arapaho Tribes of Indians of Oklahoma v.
United States, 671 F.2d 1305, 1311, 229 Ct. Cl. 434
(1982); accord Mid-South Towing Co. v. Har-Win,
Inc., 733 F.2d 386, 392 (5th Cir. 1984) ('In this
case, OKC's alleged ignorance ... is, at most, a
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unilateral mistake. There is no claim that either
Mid-South or American Employers' concealed these
other surveys or misrepresented their contents, nor
that there was any overreaching.'); Swift Chem. Co.
v. Usamex Fertilizers, Inc., 490 F. Supp. 1343, 1356
(E.D. La. 1980) ('Whatever the truth is, at best
only one of the parties could have been mistaken
about the issue. A unilateral mistake about a
particular fact is insufficient to reform a contract
otherwise properly entered into.'), aff'd, 646 F.2d
1121 (5th Cir. 1981); Albano Cleaners, Inc. [v.
United States], 455 F.2d 556, 560 (Ct. Cl. 1972);
see also Bowater No. Am. Corp. [v. Murray Mach.,
Inc.], 773 F.2d [71] at 75 [(6th Cir. 1985)] ('The
adequacy of the contract formation [of a settlement
agreement] is further supported by the [fact that]
... there was no mutual mistake, nor was there
mistake due to fraud which only one of the parties
would have known about.') (emphasis added). In the
case at bar, there was no mutual mistake or
fraudulent misrepresentation."
Brown v. County of Genesee, 872 F.2d 169, 174-75 (6th Cir.
1989). See also Allen v. WestPoint-Pepperell, Inc., 945 F.2d
40, 46 (2d Cir. 1991) (stating that "the necessary elements
for rescission based on mutual mistake [are]: both parties to
the release shared the same erroneous belief as to a material
fact, and their acts did not in fact accomplish their mutual
intent").
The "exception to the general principle denying relief
for unilateral mistake [is] when the nonmistaken party knows
or has reason to know of the unilateral mistake."
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28 Williston on Contracts § 70:229. Such was not the case
here. Gray testified without dispute that she had no idea
that Bain and Johnston had a different belief than she did as
to location of the boundary line dividing the parcel when the
parties agreed to the settlement.
In fact, as Gray observed in her "Motion for
Reconsideration," the situation presented in this case
reflects one in which the parties who made the mistake simply
made an assumption without gathering enough information to
confirm that assumption before assenting to the settlement
agreement. In a similar scenario, the United States Court of
Appeals for the Fifth Circuit explained:
"[E]ven if we accept the contention that Davis gave
his consent to the release based on a mistake of
fact concerning the role of various companies in the
alleged wrongdoing, Davis and his lawyers had an
obligation to determine the facts through discovery
before entering into a broad release of all claims.
A party to a settlement who 'has the means in hand
of ascertaining the facts, but neglects to [use
those means] cannot thereafter have the settlement
set aside because of mistake.' Talbot v. Douglas
Moving & Warehouse Co., 228 So. 2d 222, 224 (La. Ct.
App. 1969), cert. denied, 255 La. 247, 230 So. 2d 94
(1970)."
Davis v. Huskipower Outdoor Equip. Corp., 936 F.2d 193, 198
(5th Cir. 1991).
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Bain and Johnston assert that "[b]efore agreeing to the
settlement, and without a map from which to visualize starting
points, Mr. Bain did everything he could to verify the place
where the new boundary line on Parcel 57 would be in the short
space of time available to him." But the "rush" to confirm
measurements was self-imposed. There is no reason, and Bain
and Johnston offer none, why they could not have declined to
agree to the proposed settlement until they felt sure about
the location of the boundary line -- if indeed they were
unsure about its location. For that matter, there is no
reason the settlement could not have been made contingent on
the parties' agreement with the second Speaks survey
establishing the boundary line dividing the parcel. Bain and
Johnston employed neither course of action. Instead, they
voluntarily proceeded to enter into a binding settlement
agreement that they affirmed in open court, that was
memorialized in a court order, and that became a final
judgment. The current appeal arises from their request that
the trial court undo this agreement and the final judgment
resulting therefrom and provide them instead with a full trial
on the merits of the dispute in question. In short, Bain and
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Johnston requested, and the trial court granted, Rule 60(b)
relief based on their own unilateral mistake made within the
context of a free and deliberate choice to settle a matter
that had been pending for 13 years between the parties.5
5
Bain and Johnston contend that the case of Fabarc Steel
Supply, Inc. v. Davis, 422 So. 2d 797 (Ala. Civ. App. 1982),
supports the trial court's decision to grant them Rule 60(b)
relief. In Fabarc, a trial court set aside a worker's
compensation consent judgment under Rule 60(b). Ironically,
in their summary of the facts in Fabarc, Bain and Johnston
note the very fact that distinguishes that case from their
situation:
"The claimant had injured his fingers on the job,
but while he was being treated for his injuries, an
injection into his shoulder allegedly injured his
shoulder to the point that he was totally disabled.
The treating physician told the worker and his
employer that the shoulder was the result of
bursitis. Because of this, the worker went ahead
and settled his case for approximately $1500.
"After the worker learned that the problems with
his shoulder were work related, he moved to set
aside the settlement, which the trial court granted
on the grounds of mutual mistake as to the true
extent of Mr. Davis' injuries."
The Court of Civil Appeals in Fabarc affirmed the trial
court's judgment, likewise noting the existence of a mutual
mistake:
"In the instant case, plaintiff had been told by
Dr. Veach that his shoulder pain was the result of
bursitis. After contacting an attorney, he was
advised that the injury to his fingers would be
fairly compensated by the settlement agreement.
Although plaintiff was totally disabled by the pain
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"'The law favors the amicable settlement of
controversies, and it is the duty of courts rather to
encourage than to discourage parties in resorting to
compromise as a mode of adjusting conflicting claims.'" Tatum
v. Cater, 270 Ala. 445, 448, 119 So. 2d 223, 225 (1960)
(quoting 11 Am. Jur. Compromise and Settlement § 4). In this
case, the parties apparently had been attempting to settle
their dispute over the ownership of the parcel for 13 years.
When the parties finally settled, they affirmed their assent
to the terms of the settlement in open court following
specific and repeated inquiries from the trial court.
Based on the foregoing, we conclude that the trial court
erred in granting Bain and Johnston's Rule 60(b) motion that
set aside the binding settlement agreement between the
parties. We therefore reverse the September 26, 2012, order
in his shoulder and arm, everyone else involved
apparently relied on Dr. Veach's opinion that such
pain was not related to plaintiff's injury to his
fingers. In considering the 60(b) motion, the court
could have determined that plaintiff, uneducated and
not qualified to relate the shoulder pain to the
on-the-job injury, accepted the settlement in
reliance on representations that the settlement
amount was all the money to which he was entitled."
Fabarc, 422 So. 2d at 799 (emphasis added).
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granting Bain and Johnston's Rule 60(b) motion. As we noted
at the outset of our analysis, this result also necessarily
means that the trial court should not have entertained a trial
on the merits. Accordingly, the trial court's November 19,
2013, order resulting from that trial and awarding the parcel
to Bain and Johnston is due to be set aside. On remand, the
trial court is instructed to vacate its November 19, 2013,
order and to reinstate its June 12, 2012, judgment approving
the parties' settlement agreement.
REVERSED AND REMANDED WITH INSTRUCTIONS.
Main and Bryan, JJ., concur.
Moore, C.J., and Bolin, J., concur in the result.
34