In Tucker v. Scrushy, the plaintiffs filed a garnishment against Richard M. Scrushy Charitable Foundation. Among other things, the plaintiffs alleged that the Foundation was Scrushy’s alter ego. The Foundation filed an answer and the plaintiffs contested the answer.
In a separate action, the plaintiffs sued the Foundation, asserting claims under the Alabama Uniform Fraudulent Transfer Act (“AUFTA”); no “alter ego” claim was made. The Foundation moved for a partial summary judgment, asserting that the AUFTA claims were not timely brought. Following being allowed to conduct additional discovery, the plaintiffs conceded that the AUFTA claims were not timely brought.
On November 19, 2010, the plaintiffs filed a pleading (1) acknowledging that the AUFTA claims were timed barred and (2) requesting a trial as to the garnishment contest. On December 1, 2010, on the eve of a hearing on the partial summary judgment motion, the Foundation requested a summary judgment in the garnishment contest. After conducting a hearing, in which the plaintiffs objected to hearing any summary judgment motion in the garnishment contest, the trial court granted the Foundation a summary judgment in both matters.
On appeal, the Supreme Court reversed, holding that the plaintiffs were deprived the required 10-day notice and had not waived the right to such notice. The Supreme Court declared that the plaintiffs were prejudiced because they were deprived the ability to file a response within two days of the hearing. The Supreme Court rejected the Foundation’s argument that there was no prejudice because, between the hearing and the entry of an order, the plaintiffs could have filed an opposition. The Supreme Court noted that the procedural rules do not provide for the filing of an opposition after a hearing.
