First Alabama Action to Halt Sheriff’s Sale of Downtown Branch
One of the city’s oldest historic landmarks is the downtown branch of First Alabama Bank on the courthouse square – could be up for sale soon if bank officials don’t act to stay a court order issued Wednesday.
Acting on behalf of clients who won a $2 million judgment against the bank last December, attorney J. Allen Brinkley filed papers in Madison county Circuit Court Monday to have an “execution” levied against First Alabama.
The execution, according to Circuit Court Clerk Billy Harbin, provides that the attorney in the case is given all rights to sell the property of the defendant to recover the judgment.
Meanwhile, a lawyer representing the bank said his client would take action to prevent the building from being sold.
Procedures to sell both the building and the property of the West Side Square branch of First Alabama began Wednesday after the execution was delivered to the Sheriff’s Department and later served on the bank.
The case, which resulted in one of the largest judgments in the history of Madison County, is based on a $2 million award by the civil jury here last December to a prominent Huntsville Family. The jury found that First Alabama Bank mishandled the family’s substantial trust fund.
The Spragins family was awarded $1.5 million in punitive damages and $533,000 in compensatory damages.
The award was made to Marion Beirne Spragins III, Lowry Spragins and Robin Jane Spragins, heirs to the late Marion Beirne Spragins Sr.
Spragins hall at the University of Alabama in Huntsville and Spragins Street carry the family name.
Circuit Judge S.A. Watson Jr., in an order issue Monday, denied First Alabama’s motion for a new trial after considering “the evidence, briefs and all pertinent facts.”
Watson Rendered his final judgment in the case early last month.
Brinkley said Wednesday that the execution provides that the plaintiffs can “seize any real or personal property of First Alabama Bank of Huntsville that will satisfy the total monetary value ($2,071,436.68) specified.”
The execution served by the Sheriff’s Department states, “By virtue of a judgment issued out of the circuit court of Madison County, I as required by law as Sheriff of Madison County have…levied upon whatever equity the defendant may possess in and to the following property: One brick bank building with six Greek columns in front located at 216 West Side Square.”
The bank, said Brinkley, will be advertised for three weeks and “then sold in an auction if the judgment is not satisfied.”
Administrators at First Alabama would not discuss the matter Wednesday. Frank Noojin, the bank’s attorney, said today that the bank would post the necessary bond to appeal the case.
Because Watson has denied a new trial in the case, Harbin said, the only remaining method to stop the sheriff’s sale of the property is to post a bond representing 125 percent of the judgment.
That will stop everything until it goes to the Supreme Court.” he said, but “they haven’t filed bond with me.
“There’s nothing to stop the lawyer from going over to the bank and getting $2 million. He (the attorney) can start selling everything they got over there,” said Harbin.
Accoding to the Sheriff’s Department’s Judy Quillan, “We have never had one (an execution) the size of that one. But the execution tells us to sell it.”
First Alabama Bank would have to file a $2.6 million bond either in cash or securities to satisfy the circuit clerk’s office, said Brinkley.
Interest on the $2 million award since Watson issued his final judgment in February has been accruing at 12 percent or $680 a day according to Brinkley.
Currently, the bank owes $24,000 in interest, he said, and if a 125 percent bond is filed, the interest will continue.
“But that’s not my problem,” said Brinkley, “it’s their problem.”
According to the lawsuit filed in the Spragins case, the family trust went into effect during the spring of 1973 and First Alabama, as trustee, had been “under a fiduciary duty to make and retain prudent investments, and not to self deal.”
But the suit charged that First Alabama had “violated said fiduciary duty over the life of the trust by retaining, buying and selling shares of its own stock.”
In the complaint, the Spraginses contended that “over $623,000 of the assets of this $832,000 trust were in the form of stock of the defendant’s holding company yielding only 5.53 percent!”
The jury rendered the verdict after hearing charges that First Alabama had violated its fiduciary duties to the Spraginses by retaining for nine years “75 percent of the trust in uninsured common stock of its own private corporation.”
The fist bank in Alabama – Planters and Merchants Bank of Huntsville – was housed on the site that the First Alabama Bank of Huntsville building now occupies.
Chartered by Mississippi Territorial Legislature December 11, 1816, Planters and Merchant began operations October 17, 1817. The historical building has been occupied by The First National Bank of Huntsville, beginning in 1835; The National Bank of Huntsville, 1865-1889; The Northern Bank of Alabama, 1852-1865; and the Branch of the State Bank of Huntsville, 1835-1852.