Tucker v. Richard M. Scrushy Charitable Foundation, Inc

Plaintiffs Wade Tucker, the Wendell H. Cook, Sr. Testamentary Trust, and HealthSouth Corporation appealed a circuit court's partial summary judgment in favor of the Richard M. Scrushy Charitable Foundation. In 2009, the court entered a judgment against the Scrushy Foundation in favor of Plaintiffs for approximately $2.7 billion. As part of their efforts to collect on the judgment, Plaintiffs issued a process of garnishment to the Foundation. The Foundation responded to the garnishment by denying that it had possession or control of any belongings to Mr. Scrushy. Plaintiffs then contested the Foundation's response alleging, among other things, that Mr. Scrushy "dominated and controlled" the Foundation such that it was his alter ego. The Foundation did not respond to Plaintiffs' garnishment contest, but moved for summary judgment a few months later on all of Plaintiffs' claims. The Foundation maintained that Plaintiffs' actions were time barred. The Foundation’s motion did not address Plaintiffs' garnishment contest. Ultimately, the circuit court entered a summary judgment in favor of the Foundation concerning Plaintiffs’ clams brought under the Alabama Uniform Fraudulent Transfer Act (AUFTA), finding that Plaintiffs' claims under the statute were time-barred. With regard to the garnishment contest, the court entered summary judgment again, holding that Plaintiffs' claims arose from transfers Mr. Scrushy made to the Foundation rather than upon the Judgment. Upon review, the Supreme Court concluded the circuit court exceeded its discretion by conducting a hearing on the Foundation's request for a summary judgment in Plaintiffs' garnishment contest on less than ten days' notice in violation of the rules of procedure and over Plaintiffs' objections. Accordingly, the Court reversed the Circuit Court's summary judgment "insofar as it considered the Plaintiffs' garnishment contest," and remanded the case for further proceedings. View "Tucker v. Richard M. Scrushy Charitable Foundation, Inc " on Justia Law