Alabama Litigation Lawyer & Attorney : Lightfoot Franklin & White : Appellate, Alabama Supreme Court (Supreme Court of Alabama)

The state’s high court took the case to address “the required precision with which grounds must be stated in a renewed motion for a JML [judgment as a matter of law] or, alternatively, for a new trial, based on insufficiency of the evidence.” The court never returned explicitly to the issue of motions for a new trial. Motions for JML, the court said, must satisfy a two-pronged test. First, the movant “must have asked for a [JML] at the close of all evidence, specifying ‘insufficiency of the evidence’ as a ground.” Second, the movant “must have renewed this motion . . . [and] again specified the same insufficiency-of-the-evidence ground.”

In this case, the court found, “the Court of Civil Appeals could reasonably have concluded that the [defendants] failed to provide the specificity required by each prong of the test.” When they moved at the close of the plaintiffs’ case-in-chief, they argued only that “the plaintiffs failed to prove their cause of action.” When they renewed the motion later, they merely said: “We just renew the motion previously made.” They “did not specify ‘insufficiency of the evidence’ in their motion,” and the state’s high court thus found “no error” in the affirmance by the Court of Civil Appeals.

The taxpayer for several years intentionally listed fictitious assets on its tax returns, and paid the attendant tax. The taxpayer later amended its returns and sought a refund for the amounts it had overpaid as a result of claiming the fictitious property. The tax assessor, and then the Probate Court, both denied the refund. The Court of Civil Appeals affirmed this denial. The latter court held that Ala. Code § 40-10-160, providing for refunds based upon “mistake” or “error,” did not authorize refunds where overpayment resulted from the taxpayer’s intentionally false statements. The taxpayer then sought certiorari review in the Supreme Court of Alabama.

The state’s high court upheld the denials. Before it, the court said, was an issue of first impression:

whether the term ‘error’ has a meaning different from the term ‘mistake,’ [and] specifically whether the former term is broad enough to encompass intentional dishonest conduct . . . .

The taxpayer insisted that the word “error” could embrace intentional dishonesty, and that refunds could thus be given for such “errors.” The Supreme Court of Alabama disagreed. It reviewed how the words “error” and “mistake” had been used in Alabama law dating from 1873. While recognizing that “parsed” and “nuanced definitions” could be given, it agreed with the Court of Civil Appeals that, “an intentional misrepresentation is not included in the plain meaning of either word.” “The settled meaning of the terms ‘error’ and ‘mistake,’” the court wrote, “is not consistent with intentional dishonest acts.”

The court also “noted”—in a passage that is almost certainly dicta—that rules of construction did not require the words to be given discrete meanings. Statutes occasionally use synonymous terms “for clarity or emphasis,” the court explained, a drafting choice that “is clearly within the prerogative of the Legislature.”

Finally, in another question of first impression — though one of narrower application, and so perhaps of less general interest — the court held that the taxing authority had the right to assess taxes on the property listed on the taxpayer’s returns, even though those assets did not in truth exist. This discussion centered on notions of equity. The taxpayer essentially “requested the probate court to invoke its equity jurisdiction to grant the refund petitions.” But the taxpayer had not come to equity with clean hands. Equity thus did not compel the taxing authority to give a refund. Indeed, authority cited by the court argued that the taxing authority “not only may, but should, assert equitable defenses to deny refunds of taxes paid on fraudulently inflated” assets.