Mark Ryder v. James F. Mabry

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REL: 10/29/10 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2010-2011 2080992 Mark Ryder v. James F. Mabry Appeal from J e f f e r s o n C i r c u i t (CV-07-2614) Court On A p p l i c a t i o n f o r R e h e a r i n g BRYAN, J u d g e . The opinion o f March 12, 2 0 1 0 , i s w i t h d r a w n , and t h e following i s substituted therefor. Mark Ryder, t h e d e f e n d a n t below, a p p e a l s from a d e f a u l t 2080992 judgment e n t e r e d Mabry. We On i n favor of the 2007, Mabry below, James F. affirm. July 27, sued V i r g i n i a , a l l e g i n g t h a t R y d e r had buy plaintiff units resident of f r a u d u l e n t l y i n d u c e d him t h o s e u n i t s c o n s t i t u t e d s e c u r i t i e s u n d e r A l a b a m a l a w , and that part of a Ponzi Systems, scheme, Inc. to that were in Profit a ("PIPS"), they i n People Ryder, which had resulted in M a b r y ' s l o s i n g t h e $ 4 2 , 0 2 2 . 6 7 he had p a i d f o r t h e PIPS u n i t s . Mabry s t a t e d c l a i m s o f c o n v e r s i o n , Alabama s t a t u t e s g o v e r n i n g Ryder, a c t i n g pro se, the f r a u d , and v i o l a t i o n o f s a l e of filed an securities. answer d e n y i n g liability and a s s e r t i n g , as an a f f i r m a t i v e d e f e n s e , t h a t t h e t r i a l lacked had i n personam j u r i s d i c t i o n sufficient completion trial on On the contacts of d i s c o v e r y , J u l y 14, May 23, action on the o v e r him b e c a u s e he the State trial court of court had not Alabama. s e t the Upon action for 2008. 2008, R y d e r moved t h e the j u r i s d i c t i o n o v e r him. ground requests that trial i t court lacked in to dismiss personam S p e c i f i c a l l y , Ryder's motion to dismiss a s s e r t e d t h a t Mabry had discovery with the admitted i n h i s responses to Ryder's t h a t Ryder's only contacts 2 w i t h the State 2080992 o f A l a b a m a were f o u r t e l e p h o n e c a l l s t h a t Mabry h a d made t o R y d e r w h i l e R y d e r was i n V i r g i n i a . Contemporaneously d i s m i s s , Ryder filed with the f i l i n g of h i s motion a m o t i o n f o r a summary j u d g m e n t . o f t h e g r o u n d s o f h i s summary-judgment m o t i o n , R y d e r that the t r i a l c o u r t l a c k e d i n personam to As one asserted jurisdiction, a n d he a d o p t e d h i s m o t i o n t o d i s m i s s as h i s s t a t e m e n t o f t h a t g r o u n d . In r e s p o n s e t o Ryder's m o t i o n t o d i s m i s s , Mabry a s s e r t e d t h a t t h e m o t i o n was u n t i m e l y b e c a u s e , Mabry s a i d , R u l e Ala. R. C i v . P., r e q u i r e d that a motion to dismiss 12(b), on t h e ground of l a c k of p e r s o n a l j u r i s d i c t i o n be made b e f o r e Ryder filed Mabry a s s e r t e d that, h i s answer. In the a l t e r n a t i v e , b e c a u s e R y d e r h a d s o l d s e c u r i t i e s t o an A l a b a m a r e s i d e n t a n d those seq., sales violated A l a . Code jurisdiction The the earlier, trial 1975, t h e Alabama courts had personal over Ryder. trial trial. t h e A l a b a m a S e c u r i t i e s A c t , § 8-6-1 e t court Several d i d n o t r u l e on R y d e r ' s m o t i o n s days before the t r i a l , which, before as n o t e d was s c h e d u l e d f o r J u l y 14, 2008, R y d e r i n f o r m e d t h e c o u r t by l e t t e r t h a t he w o u l d n o t be a p p e a r i n g t r i a l a n d t h a t he h a d p r e v i o u s l y a s s e r t e d t h a t t h e t r i a l 3 at the court 2080992 l a c k e d i n personam j u r i s d i c t i o n o v e r him i n h i s answer and i n two m o t i o n s . When R y d e r d i d n o t a p p e a r a t t h e t r i a l , t h e t r i a l court entered motion an o r d e r to dismiss, on J u l y granting 16, 2008, the oral denying Ryder's motion f o r a d e f a u l t j u d g m e n t t h a t Mabry h a d made a f t e r R y d e r f a i l e d t o a p p e a r a t trial, and s e t t i n g August 18, 2008. Ryder's The t r i a l on t h e i s s u e court o f damages f o r d i d not expressly r u l e on m o t i o n ; however, t h e t r i a l summary-judgment J u l y 16, 2008, o r d e r that a hearing court's i s i n c o n s i s t e n t w i t h an i n t e n t t o g r a n t motion. Ryder d i d n o t a p p e a r a t t h e A u g u s t 18, 2008, hearing. Mabry a n d h i s a t t o r n e y a p p e a r e d a t t h e h e a r i n g a n d i n t r o d u c e d evidence establishing a violated t h e Alabama entitled t o recover prima facie case that S e c u r i t i e s A c t and t h a t the t o t a l amount Ryder had Mabry o f $59,991.20 was on h i s c l a i m s t h a t R y d e r h a d v i o l a t e d t h e A l a b a m a S e c u r i t i e s A c t . On March 2, 2009, the t r i a l court entered a default judgment a g a i n s t R y d e r a n d a w a r d e d Mabry t h e f u l l amount o f t h e damages he h a d s o u g h t . The j u d g m e n t s t a t e d : " T h i s c a s e comes b e f o r e t h e C o u r t on P l a i n t i f f James F. M a b r y ' s ('Mabry') c o m p l a i n t a g a i n s t t h e d e f e n d a n t Mark R y d e r ('Ryder') a l l e g i n g v i o l a t i o n s o f t h e A l a b a m a S e c u r i t i e s A c t as w e l l as f r a u d a n d 4 2080992 conversion. The allegations contained in the c o m p l a i n t s t e m f r o m l o s s e s i n c u r r e d by Mr. M a b r y due to h i s investment i n a ' h i g h y i e l d investment' o p p o r t u n i t y c a l l e d People i n P r o f i t Systems, I n c . or 'PIPS.' " T h i s c a s e was s e t f o r a b e n c h t r i a l on J u l y 14, 2008. On J u l y 11, 2008, a f a c s i m i l e was r e c e i v e d by t h i s C o u r t f r o m Mr. R y d e r d e c l i n i n g t o a t t e n d t h e trial. [Ryder's] facsimile stated that the i n personam j u r i s d i c t i o n a l arguments r a i s e d i n h i s A n s w e r , M o t i o n f o r Summary J u d g m e n t , and M o t i o n t o D i s m i s s were t h e r e a s o n f o r n o t a t t e n d i n g t r i a l . The two a f o r e m e n t i o n e d m o t i o n s were n o t s u p p o r t e d by a f f i d a v i t s o r e v i d e n c e o f any k i n d nor had a h e a r i n g o f s u c h m o t i o n s b e e n r e q u e s t e d . True t o h i s w o r d , [Ryder] d i d n o t a p p e a r a t t r i a l . Mabry and h i s c o u n s e l a p p e a r e d a t t r i a l and r e q u e s t e d t h e C o u r t e n t e r a d e f a u l t a g a i n s t the defendant Ryder. This C o u r t e x p l a i n e d t o Mabry and h i s c o u n s e l t h a t upon e n t r y o f d e f a u l t , a h e a r i n g w o u l d be r e q u i r e d n o t o n l y as t o damages b u t t h i s C o u r t w o u l d a l s o r e q u i r e p r o o f of the b a s i c elements of Mabry's c l a i m s as t h i s C o u r t may r e q u i r e p u r s u a n t t o R u l e 55 o f t h e A l a b a m a R u l e s o f C i v i l P r o c e d u r e . On J u l y 15, 2008, t h i s C o u r t , h a v i n g c o n s i d e r e d t h e m o t i o n s o f [Mabry] and [ R y d e r ] , e n t e r e d an O r d e r ( i ) d e n y i n g R y d e r ' s motions f o r l a c k of proper e v i d e n t i a r y support, ( i i ) g r a n t i n g Mabry's motion for default, and ( i i i ) setting a formal hearing. "On A u g u s t 18, 2008, a h e a r i n g was h e l d f o r t h e p r o o f o f damages and p r o o f o f t h e e l e m e n t s n e c e s s a r y t o s u b s t a n t i a t e M a b r y ' s c l a i m s . As a p r e l i m i n a r y m a t t e r , i t was shown t o t h e C o u r t t h a t R y d e r h a d been investigated by the Alabama Securities Commission with respect to his PIPS related a c t i v i t i e s . The C o u r t was p r e s e n t e d w i t h a c e r t i f i e d c o p y o f C e a s e and D e s i s t O r d e r , d a t e d A p r i l 8, 2008, i s s u e d a g a i n s t Ryder. T h i s o r d e r found Ryder, a f o r m e r r e g i s t e r e d s e c u r i t i e s a g e n t ... i n t h e S t a t e s o f N o r t h C a r o l i n a and V i r g i n i a , t o have b e e n an 5 2080992 a g e n t o f P I P S and t o have v i o l a t e d t h e p r o v i s i o n s o f s e c t i o n s 8-6-3 and 8-6-4 o f t h e Code o f A l a b a m a 1975, as amended ( t h e ' C o d e ' ) , by: (I) s e l l i n g u n r e g i s t e r e d PIPS s e c u r i t i e s i n t h e S t a t e o f A l a b a m a and ( i i ) s e l l i n g s e c u r i t i e s i n t h e S t a t e o f A l a b a m a without being ... r e g i s t e r e d as [a] securities b r o k e r or agent i n the S t a t e of Alabama. T h i s o r d e r f u r t h e r b a r r e d Ryder from f u r t h e r s e l l i n g s e c u r i t i e s ' i n t o , w i t h i n o r f r o m ' t h e S t a t e o f A l a b a m a . Mr. R y d e r d i d n o t c o n t e s t t h e f i n d i n g s o f t h i s C e a s e and D e s i s t Order. T h i s uncontested order i s s i g n i f i c a n t b e c a u s e i t s f i n d i n g s t o u c h on t h e a l l e g a t i o n s o f t h i s c a s e and b e c a u s e t h e c e r t i f i e d c o p y o f t h e uncontested order presented to this Court c o n s t i t u t e s 'prima f a c i e e v i d e n c e o f t h e c o n t e n t s o f t h e e n t r y o r document c e r t i f i e d . ' A l a . Code § o c o o 8-6-28. " A f t e r a r e v i e w o f t h e C e a s e and D e s i s t O r d e r , Mabry p r e s e n t e d u n c o n t r o v e r t e d t e s t i m o n y r e g a r d i n g the elements of his securities claims. Mabry t e s t i f i e d t h a t Ryder f r a u d u l e n t l y i n d u c e d him t o i n v e s t i n P I P S m u l t i p l e t i m e s by: ( i ) t o u t i n g h i s own h i g h i n v e s t m e n t r e t u r n s i n P I P S ; ( i i ) t o u t i n g h i s b e i n g a p a r t of the PIPS o r g a n i z a t i o n ; ( i i i ) t o u t i n g h i s c l o s e r e l a t i o n s h i p w i t h c e r t a i n 'high up' p e r s o n s i n t h e P I P S o r g a n i z a t i o n ; ( i v ) c l a i m i n g ' i n s i d e r ' knowledge of the i n n e r - w o r k i n g s of the PIPS o r g a n i z a t i o n and i t s i n v e s t m e n t p r o d u c t s ; and (v) t o u t i n g h i s i n v e s t m e n t k n o w l e d g e as a p e r s o n f o r m e r l y i n t h e s e c u r i t i e s f i e l d . These m i s l e a d i n g representations were made by Ryder ... in approximately t h i r t y (30) t e l e p h o n e c o n v e r s a t i o n s b e t w e e n Mabry and R y d e r r e g a r d i n g t h e p u r c h a s e o f PIPS u n i t s b e t w e e n t h e months o f A p r i l , 2005 and J u l y , 2005 ( b o t h Mabry c a l l i n g R y d e r and Ryder c a l l i n g Mabry). "Consistent with the Alabama Securities Commission's o r d e r , Mabry s t a t e d t h a t , i n c o n n e c t i o n w i t h h i s e a c h and e v e r y p u r c h a s e o f P I P S u n i t s , he v i e w e d R y d e r t o be an a g e n t o f t h e P I P S o r g a n i z a t i o n 6 2080992 and t h a t R y d e r ' s a c t i o n s and s a l e s p i t c h e s were c o n s i s t e n t w i t h t h a t o f an a g e n t . Mabry t e s t i f i e d t h a t h i s d i s c o v e r y a f t e r t h e d e m i s e o f PIPS t h a t R y d e r had r e c e i v e d c o m m i s s i o n s i n c o n n e c t i o n with h i s s a l e s o f PIPS u n i t s t o Mabry i n e x c e s s o f $5,000 f u r t h e r c o n f i r m e d h i s e a r l y c o n c l u s i o n t h a t Ryder was a c t i n g on b e h a l f o f P I P S . "Mabry f u r t h e r t e s t i f i e d t h a t he i n v e s t e d a t o t a l o f $42,022.67 i n P I P S as a d i r e c t r e s u l t o f R y d e r ' s r e p r e s e n t a t i o n s r e g a r d i n g P I P S . The amounts and d a t e s were as f o l l o w s : $481.50 on A p r i l 25, 2005, $9,950.00 on A p r i l 30, 2005, $2,500.00 on May 24, 2005, $2,600.00 on May 30, 2005, $3,000.00 on June 2, 2005, $3,091.17 on J u l y 2, 2005, and $20,400.00 on J u l y 29, 2005. C a n c e l e d c h e c k s , bank s t a t e m e n t s , and P I P S r e c e i p t s were p r e s e n t e d t o t h e C o u r t as e v i d e n c e o f t h e amounts and dates of i n v e s t m e n t . Mabry t e s t i f i e d t h a t he r e a l i z e d t h a t PIPS was a scam i n S e p t e m b e r , 2005 a f t e r t h e P I P S w e b s i t e had d i s a p p e a r e d , R y d e r f a i l e d t o r e t u r n h i s phone c a l l s , and he r e a d o f t h e a r r e s t o f Mr. B r i a n Marsden, founder of the PIPS o r g a n i z a t i o n , in Malaysia for various f r a u d r e l a t e d bank crimes connected to the PIPS o r g a n i z a t i o n . A f t e r this d i s c o v e r y , Mabry was n o t w i l l i n g o r a b l e t o s e l l h i s PIPS u n i t s , w h i c h he t h e n c o n s i d e r e d t o be b o g u s , and he f a i l e d i n h i s a t t e m p t s t o g a i n a r e t u r n o f h i s i n v e s t m e n t f r o m R y d e r and t h e P I P S o r g a n i z a t i o n . " C o u n t s I I and I I I o f M a b r y ' s C o m p l a i n t r e l a t e t o the r e t u r n of monies i n v e s t e d i n u n r e g i s t e r e d s e c u r i t i e s and t h e r e t u r n o f m o n i e s i n v e s t e d i n s e c u r i t i e s where m i s r e p r e s e n t a t i o n s were made i n c o n n e c t i o n w i t h t h e i r s a l e . C o u n t I I and C o u n t I I I b o t h i n v o l v e v i o l a t i o n s o f s e c t i o n 8-6-19 o f t h e Code. " S e c t i o n 8 - 6 - 1 9 ( a ) ( 1 ) o f t h e Code p r o v i d e s t h a t any p e r s o n who s e l l s an u n r e g i s t e r e d s e c u r i t y i n v i o l a t i o n of the Alabama S e c u r i t i e s A c t i s l i a b l e ... t o t h e p e r s o n b u y i n g t h e s e c u r i t y [ f r o m h i m f o r 7 2080992 the c o n s i d e r a t i o n p a i d f o r t h e s e c u r i t y , ] t o g e t h e r w i t h i n t e r e s t a t s i x p e r c e n t p e r year from t h e date of payment, c o u r t c o s t s a n d r e a s o n a b l e a t t o r n e y f e e s , upon t h e t e n d e r o f t h e s e c u r i t y . A l l a c t i o n s brought under s e c t i o n 8-6-19(a)(1) o f t h e Code i n v o l v i n g t h e s a l e o f u n r e g i s t e r e d s e c u r i t i e s must be b r o u g h t w i t h i n two y e a r s o f t h e s a l e o f t h e s e c u r i t y . A l a . Code § 8 - 6 - 1 9 ( f ) . A c c o r d i n g t o t h e A l a b a m a S e c u r i t i e s C o m m i s s i o n , ... Mabry p u r c h a s e d PIPS u n i t s t h r o u g h P I P S ' a g e n t R y d e r a n d t h e s e u n i t s c o n s t i t u t e d s e c u r i t i e s t h a t were n o t r e g i s t e r e d i n A l a b a m a . Mabry t e s t i f i e d t o t h e s e u n r e g i s t e r e d s a l e s and t h a t $20,400.00 was i n v e s t e d on J u l y 29, 2005 -¬ w i t h i n two y e a r s o f t h e J u l y 27, 2007 f i l i n g o f M a b r y ' s c o m p l a i n t . Mabry r e t a i n e d h i s P I P S u n i t s a n d attempted t o r e c o v e r h i s investment from Ryder. A c c o r d i n g l y , under s e c t i o n s 8-6-19(a)(1) and - 1 9 ( f ) of t h e Code, Mabry i s e n t i t l e d t o r e c o v e r f r o m R y d e r this $20,400 i n v e s t m e n t , plus interest at s i x p e r c e n t (6%) p e r y e a r f r o m payment a n d r e a s o n a b l e a t t o r n e y f e e s . W h i l e a l l o f t h e PIPS s e c u r i t i e s p u r c h a s e d b y Mabry were u n r e g i s t e r e d , h i s e a r l i e r investments are precluded from recovery under section 8-6-19(a)(1) of t h e Code as these e s t m e n t s were made more t h a n two y e a r s b e f o r e t h e inv A,..,-., x r ,! ., , I s C o m p l a i n t . However, f i l i n g o f iM /a- b- r,y, ,' s C o m p l a i n t . However, t h e e a r l i e r investments a r e s t i l l e l i g i b l e f o r r e c o v e r y under /ON ^ - p 4-1-,^ r'^ ^ ^ s e c t i o n 8 - 6 - 1 9 ( a ) ( 2 ) o f t h e Code. " S e c t i o n 8 - 6 - 1 9 ( a ) ( 2 ) o f t h e Code p r o v i d e s t h a t any p e r s o n who s e l l s o r o f f e r s a s e c u r i t y b y means of a n y u n t r u e s t a t e m e n t o f a m a t e r i a l f a c t i s l i a b l e ... t o t h e p e r s o n b u y i n g t h e s e c u r i t y [ f r o m h i m f o r the c o n s i d e r a t i o n p a i d f o r the s e c u r i t y , ] t o g e t h e r w i t h i n t e r e s t a t s i x p e r c e n t p e r year from t h e date of payment, c o u r t c o s t s a n d r e a s o n a b l e a t t o r n e y f e e s , upon t h e t e n d e r o f t h e s e c u r i t y . A l l a c t i o n s brought under s e c t i o n 8-6-19(a)(2) o f t h e Code i n v o l v i n g untrue statements i n connection w i t h the s a l e o f s e c u r i t i e s must be b r o u g h t w i t h i n two y e a r s of t h e d i s c o v e r y o f t h e m i s r e p r e s e n t a t i o n o r two y e a r s a f t e r d i s c o v e r y s h o u l d have b e e n made b y 8 2080992 e x e r c i s i n g r e a s o n a b l e c a r e . A l a Code § 8 - 6 - 1 9 ( f ) . A c c o r d i n g t o M a b r y ' s t e s t i m o n y , R y d e r made m a t e r i a l m i s r e p r e s e n t a t i o n s i n c o n n e c t i o n w i t h each and e v e r y sale o f PIPS u n i t s t o R y d e r , including false r e p r e s e n t a t i o n s r e g a r d i n g h i s own p e r s o n a l r e t u r n s r e c e i v e d t h r o u g h P I P S . Mabry e x e r c i s e d c a r e b y m o n i t o r i n g h i s PIPS i n v e s t m e n t s b u t d i d n o t d i s c o v e r t h a t t h e r e p r e s e n t a t i o n s made b y R y d e r were f a l s e and t h a t P I P S was a scam u n t i l S e p t e m b e r , 2005 -¬ w i t h i n two y e a r s o f t h e J u l y 27, 2007 f i l i n g o f M a b r y ' s c o m p l a i n t . Mabry r e t a i n e d h i s PIPS u n i t s a n d attempted t o recover h i s investment from Ryder. A c c o r d i n g l y , under s e c t i o n s 8-6-19(a)(2) and - 1 9 ( f ) , Mabry i s e n t i t l e d t o r e c o v e r t h e e n t i r e $42,022.67 he i n v e s t e d i n P I P S , p l u s i n t e r e s t a t s i x p e r c e n t (6%) p e r y e a r f r o m payment a n d r e a s o n a b l e attorney fees. " C o n s i d e r i n g t h e t e s t i m o n y and s u b m i s s i o n s by [ M a b r y ] , t h e C o u r t f i n d s t h a t Mabry i s e n t i t l e d t o r e c o v e r t h e $42,022.67 he i n v e s t e d i n P I P S , p l u s s i x percent (6%) p e r annum i n t e r e s t on t h e amounts i n v e s t e d t o t a l i n g $8,230.67 a n d r e a s o n a b l e a t t o r n e y f e e s o f $17,718.75. C o s t s a r e t a x e d t o [ R y d e r ] . " On M a r c h 25, 2009, R y d e r f i l e d a motion t i t l e d A l t e r , V a c a t e , o r Amend" i n w h i c h he a g a i n trial court addition, he lacked i n personam asserted liable t o Mabry b e c a u s e , he s a i d , broker of s e c u r i t i e s asserted that the jurisdiction f o r the f i r s t time "Motion t o over that him. I n he was n o t (1) he was n o t a d e a l e r o r as d e f i n e d b y § 8-6-2, A l a . Code 1 9 7 5 ; (2) he was n o t r e q u i r e d t o r e g i s t e r as a d e a l e r or agent i n A l a b a m a b e c a u s e , he s a i d , he d i d n o t have an o f f i c e i n A l a b a m a and he d i d n o t d i r e c t b u s i n e s s communications t o 5 c l i e n t s i n 9 2080992 A l a b a m a d u r i n g a n y p e r i o d o f 12 c o n s e c u t i v e months; not engaged securities; applicable i n the business and of effecting (4) M a b r y ' s claims statute of l i m i t a t i o n s . that the t r i a l court had e r r e d (3) he was transactions i n were barred by t h e I n a d d i t i o n , he a s s e r t e d (1) i n a d m i t t i n g i n t o evidence the c e r t i f i e d copy o f t h e c e a s e - a n d - d e s i s t order i s s u e d by t h e Alabama Securities the truth contents d e s p i t e the hearsay Commission t o prove nature of of i t s contents, (2) i t s in f i n d i n g i n f a v o r o f Mabry w i t h r e s p e c t t o h i s f r a u d c l a i m , a n d (3) i n finding conversion claim. i n favor Mabry o f Mabry responded with respect t o Ryder's to his postjudgment motion. On May 2 1 , 2009, the t r i a l court entered an amending i t s j u d g m e n t . I n p e r t i n e n t p a r t , t h a t o r d e r order stated: " W i t h t h i s C o u r t ' s [March 2,] 2009 O p i n i o n A n d Order i n t h e above styled a c t i o n having been r e t u r n e d by t h e C l e r k ' s O f f i c e f o r c l a r i f i c a t i o n , s a i d O r d e r i s h e r e b y AMENDED t o c l a r i f y t h a t on p r o o f , P l a i n t i f f , James F. M a b r y i s GRANTED Judgment b y D e f a u l t a g a i n s t t h e D e f e n d a n t , Mark R y d e r , i n t h e amount o f $59,991,20. " S a i d Judgment i s c o m p r i s e d o f t h e $42,022.67 [Mabry] i n v e s t e d i n P I P S , p l u s s i x p e r c e n t (6%) p e r annum i n t e r e s t on t h e amounts i n v e s t e d t o t a l i n g $8,230.67 and r e a s o n a b l e attorneys fees i n the amount o f $9,737.86. R e a s o n a b l e a t t o r n e y s f e e s a r e d e t e r m i n e d b y t a k i n g 3 3 % o f t h e f i r s t $10,000,00 o f 10 2080992 the Judgment a n d 20% o f t h e r e m a i n i n g balance." F o l l o w i n g a h e a r i n g on June 15, 2009, t h e t r i a l c o u r t , on June 22, 2009, e n t e r e d an o r d e r i n which i t t r e a t e d Ryder's "Motion t o A l t e r , V a c a t e , a n d Amend" as a R u l e 5 5 ( c ) , A l a . R. Civ. for relief P., motion denied the motion. court, which from the default judgment and R y d e r t h e n t i m e l y a p p e a l e d t o t h e supreme transferred the appeal g r o u n d t h a t t h e a p p e a l was w i t h i n t h i s to this court's court on t h e jurisdiction. Ryder f i r s t argues t h a t t h e t r i a l c o u r t e r r e d i n e n t e r i n g the default judgment against him and i n denying him r e l i e f f r o m t h a t j u d g m e n t b e c a u s e , he s a y s , t h e t r i a l c o u r t l a c k e d i n personam j u r i s d i c t i o n o v e r h i m . He a r g u e s t h a t t h e t r i a l l a c k e d i n personam j u r i s d i c t i o n only contacts court o v e r h i m b e c a u s e , he s a y s , t h e b e t w e e n h i m a n d t h e S t a t e o f A l a b a m a were four t e l e p h o n e c a l l s , a l l o f w h i c h were i n i t i a t e d b y Mabry. F i r s t , we n o t e t h a t t h e t r i a l the August 18, 2008, h e a r i n g p a r t i c i p a t e d i n approximately that court received evidence a t indicated that Ryder had 30 t e l e p h o n e c a l l s w i t h Mabry i n w h i c h R y d e r h a d made r e p r e s e n t a t i o n s r e g a r d i n g PIPS s e c u r i t i e s and t h a t some o f t h o s e t e l e p h o n e c a l l s h a d b e e n i n i t i a t e d b y Ryder. Second, even i f t h e r e were o n l y 11 four telephone calls 2080992 and they were a l l i n i t i a t e d b y Mabry, those four telephone c a l l s would c o n s t i t u t e s u f f i c i e n t contacts w i t h t h i s s t a t e t o confer those i n personam j u r i s d i c t i o n telephone calls on a c o u r t of this state i f r e s u l t e d i n Ryder's s e l l i n g a s e c u r i t y in this state. " P r o c e d u r a l l y , j u r i s d i c t i o n o v e r an o u t - o f - s t a t e defendant i s o b t a i n e d p u r s u a n t t o t h e 'long-arm' r u l e , A l a . R. C i v . P. 4 . 2 ( b ) , as amended A u g u s t 1, 2004. A p e r s o n o r e n t i t y i s s u b j e c t t o j u r i s d i c t i o n u n d e r R u l e 4.2(b) when t h a t ' p e r s o n o r e n t i t y h a s such c o n t a c t s w i t h t h i s s t a t e t h a t t h e p r o s e c u t i o n of the a c t i o n a g a i n s t the person or e n t i t y i n t h i s state i s not i n c o n s i s t e n t with the c o n s t i t u t i o n of t h i s state or the C o n s t i t u t i o n of the United States ' R u l e 4.2(b) now e m b o d i e s t h e ' c a t c h a l l ' c l a u s e t h a t was f o u n d i n s u b p a r a g r a p h ( I ) o f R u l e 4.2 b e f o r e i t was amended. 'The s t r u c t u r e o f f o r m e r 4.2 i n c l u d e d a "laundry l i s t " of types of conduct t h a t w o u l d s u b j e c t an o u t - o f - s t a t e d e f e n d a n t t o p e r s o n a l j u r i s d i c t i o n i n A l a b a m a , as w e l l as t h e " c a t c h a l l " c l a u s e now c o n t a i n e d i n new 4 . 2 ( b ) . ' Committee Comments t o Amendment t o R u l e 4.2 E f f e c t i v e A u g u s t 1, 2004. ' [ S ] u b p a r a g r a p h ( I ) [was] b u t a r e s t a t e m e n t of the current definition of the federal c o n s t i t u t i o n a l s t a n d a r d . ' C o m m i t t e e Comments on 1977 C o m p l e t e R e v i s i o n t o R u l e 4.2. "That standard ' " i s the minimum-contacts s t a n d a r d e l u c i d a t e d i n I n t e r n a t i o n a l Shoe [Co. v . W a s h i n g t o n , 326 U.S. 310, 66 S . C t . 154, 90 L . E d . 95 ( 1 9 4 5 ) ] , " ' a n d i t s p r o g e n y . B e a r d e n v. B y e r l y , 494 So. 2d 59, 61 ( A l a . 1986) ( q u o t i n g S h a f f e r v . Heitner, 433 U.S. 186, 207, 97 S . C t . 2569, 53 L.Ed.2d 683 ( 1 9 7 7 ) ) . Under t h a t s t a n d a r d , '[a] p h y s i c a l p r e s e n c e i n Alabama i s n o t a p r e r e q u i s i t e to personal j u r i s d i c t i o n over a nonresident.' Sieber v. C a m p b e l l , 810 So. 2d 641, 644 ( A l a . 2 0 0 1 ) . What 12 2080992 i s r e q u i r e d , h o w e v e r , i s t h a t t h e d e f e n d a n t have such contacts with Alabama that i t '"should reasonably anticipate being haled into court [ h e r e ] . " ' D i l l o n E q u i t i e s v. P a l m e r & Cay, I n c . , 501 So. 2d 459, 462 ( A l a . 1986) ( q u o t i n g World-Wide V o l k s w a g e n C o r p . v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). "The s t a n d a r d i s met where 'the d e f e n d a n t [has] " p u r p o s e f u l l y a v a i l e d " i t s e l f of conducting a c t i v i t y in the f o r u m s t a t e , by directly targeting i t s [ a c t i v i t i e s a t ] t h e s t a t e . ' Toys 'R' Us, I n c . v. S t e p Two, S.A., 318 F.3d 446, 454 (3d C i r . 2 0 0 3 ) . '"This p u r p o s e f u l - a v a i l m e n t requirement assures t h a t a d e f e n d a n t w i l l n o t be h a l e d i n t o a j u r i s d i c t i o n as a r e s u l t of '"the u n i l a t e r a l a c t i v i t y of a n o t h e r p e r s o n o r a t h i r d p e r s o n . " ' " ' Ex p a r t e D i l l , D i l l , C a r r , S t o n b r a k e r & H u t c h i n g s , P.C., 866 So. 2d 519, 525-26 ( A l a . 2003) ( q u o t i n g E l l i o t t v. Van Kleef, 830 So. 2d 726, 731 (Ala. 2002), quoting i n t u r n B u r g e r K i n g C o r p . v. R u d z e w i c z , 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 ( 1 9 8 5 ) ) . Thus, t h e u l t i m a t e q u e s t i o n u n d e r R u l e 4.2(b) i s t h e same as under former Rule 4 . 2 ( a ) ( 2 ) ( I ) , namely, whether the o u t - o f - s t a t e d e f e n d a n t s have 'some minimum c o n t a c t s w i t h t h i s s t a t e [ t h a t ] ... i t i s f a i r and r e a s o n a b l e t o r e q u i r e [them] t o come t o t h i s s t a t e t o d e f e n d an a c t i o n . ' (Emphasis added.)" Ex p a r t e Reindel, 963 So. 2d 614, In p e r t i n e n t p a r t , S e c t i o n provides 8 - 6 - 1 2 ( a ) ( 2 ) , A l a . Code 1975, "an i s made and a c c e p t e d i n t h i s s t a t e . " I n p e r t i n e n t p a r t , § 8 - 6 - 1 2 ( c ) , A l a . Code 1975, this ( A l a . 2007). t h a t a p e r s o n s e l l s s e c u r i t i e s i n t h i s s t a t e when o f f e r t o buy buy 617-18 provides i s made i n t h i s s t a t e "when t h e o f f e r ... t h a t an o f f e r to o r i g i n a t e s from s t a t e . " I n p e r t i n e n t p a r t , § 8 - 6 - 1 2 ( d ) , A l a . Code 13 1975, 2080992 p r o v i d e s t h a t an o f f e r t o b u y " i s a c c e p t e d i n t h i s s t a t e when a c c e p t a n c e ... i s c o m m u n i c a t e d t o t h e o f f e r o r i n t h i s In this case, Ryder sold a security state." i n Alabama because (1) Mabry was i n t h i s s t a t e when he c o m m u n i c a t e d h i s o f f e r s t o b u y the P I P S s e c u r i t i e s t o R y d e r a n d (2) Mabry was i n t h i s when Ryder communicated h i s acceptance of those state offers to Mabry. See §§ 8 - 6 - 1 2 ( a ) ( 2 ) , 8 - 6 - 1 2 ( c ) , a n d 8 - 6 - 1 2 ( d ) . Thus, t h e i s s u e this state i s whether Ryder's s a l e o f s e c u r i t i e s i n i n the course of four i n i t i a t e d b y Mabry c o n s t i t u t e s state t o make i t "'fair come t o t h i s s t a t e 963 to action. Ryder and r e a s o n a b l e to require t o d e f e n d an a c t i o n . ' " t o come conversations s u f f i c i e n t contacts with So. 2d a t 618. We c o n c l u d e t h a t require telephone to this state By a c c e p t i n g M a b r y ' s o f f e r s [him] t o Ex p a r t e i t i s fair this Reindel, and r e a s o n a b l e t o defend Mabry's t o purchase s e c u r i t i e s , Ryder p u r p o s e l y a v a i l e d h i m s e l f o f c o n d u c t i n g a c t i v i t y i n t h i s s t a t e . M o r e o v e r , b e c a u s e R y d e r a c c e p t e d M a b r y ' s o f f e r s , he i s not being haled into court i n Alabama u n i l a t e r a l a c t i v i t y of a t h i r d party. of Mabry's o f f e r s made i t r e a s o n a b l e as a r e s u l t F i n a l l y , h i s acceptance f o r him t o a n t i c i p a t e t h a t he m i g h t be h a l e d i n t o a c o u r t i n t h i s s t a t e . 14 of the Therefore, 2080992 we find no merit i n Ryder's argument l a c k e d i n personam j u r i s d i c t i o n over that the trial court him. Ryder a l s o argues t h a t the t r i a l c o u r t e r r e d i n a d m i t t i n g the cease-and-desist proving the contents August 18, of into c o n s t i t u t e hearsay. the truth order evidence i t s contents 2008, and admission of the c e a s e - a n d - d e s i s t contained hearsay. that e r r o r may evidence not unless "a be court's judgment he says, timely object to A l a . R. Evid., p r e d i c a t e d upon a r u l i n g the objection basis the or motion provides that admits to strike " T h e r e f o r e , we c a n n o t r e v e r s e t h e on its o r d e r on t h e g r o u n d t h a t i t 103(a)(1), timely appears of r e c o r d because, of However, R y d e r d i d n o t a p p e a r a t hearing Rule f o r the purpose of objection that court i n compliance with R y d e r d i d n o t make i n t h e t r i a l a hearsay trial Rule 103(a)(1). In a d d i t i o n , R y d e r a r g u e s t h a t § 8-6-28, A l a . Code insofar as such the as evidence of the i t provides that cease-and-desist a certified order copy of States C o n s t i t u t i o n and A l a b a m a C o n s t i t u t i o n o f 1901. document c o n s t i t u t e s prima o f i t s c o n t e n t s , r u n s a f o u l o f t h e Due United a 1975, Process Article 13 facie Clause of However, t h e r e c o r d c o n t a i n s 15 the no 2080992 i n d i c a t i o n t h a t Ryder n o t i f i e d the a t t o r n e y g e n e r a l of Alabama of h i s c o n s t i t u t i o n a l challenge 6-6-227, A l a . Code 1975. t o § 8-6-28, as r e q u i r e d by Therefore, Ryder's challenge C i t y of F l o r e n c e , (holding that the constitutional because was the attorney issue not party constitutionality general 688 So. whether properly making of the of the 2d 233, before the challenge as from default that judgment judgment against him because, he was supreme not court to the notified r e q u i r e d by Ryder a l s o argues t h a t the t r i a l the 1996) the had See (Ala. challenge ordinance the ordinance an 234 to us. c o n s t i t u t i o n a l i t y o f § 8-6-28 i s n o t p r o p e r l y b e f o r e B r a t t o n v. § § the 6-6-227). court erred i n entering and i n d e n y i n g him says, his sales relief of PIPS s e c u r i t i e s i n t h i s s t a t e were exempt f r o m t h e r e q u i r e m e n t s o f the Code Alabama S e c u r i t i e s A c t 1975, Alabama and because, d i d not he by virtue says, direct he that " [ i ] t i s unlawful this state as representative an § 8-6-3(b)(3), have an Ala. office communications S e c t i o n 8-6-3(b)(3) in ... advisor [h]e 16 has no or investment place of in this provides f o r any p e r s o n t o t r a n s a c t b u s i n e s s investment unless d i d not business s t a t e t o more t h a n f i v e c l i e n t s . of in advisor business in 2080992 t h i s s t a t e and d u r i n g any p e r i o d o f 12 c o n s e c u t i v e months does n o t d i r e c t b u s i n e s s c o m m u n i c a t i o n s i n t h i s s t a t e i n any manner to more than entities. five clients" other than (Emphasis added.) However, § certain specified 8-6-3(b) (3) does not c o n t a i n any l a n g u a g e e x e m p t i n g a p e r s o n who t r a n s a c t s b u s i n e s s i n t h i s s t a t e as an a g e n t f o r s e c u r i t i e s f r o m t h e r e q u i r e m e n t that he or she transacting register b u s i n e s s as a Moreover, § 8-6-3(b)(3) exempting a security registered pursuant pursuant does § the 8-6-4 before in this state. contain not 8-6-3(a) agent securities from to to § any requirement language that before i t i s sold i t in be this s t a t e . A c c o r d i n g l y , we f i n d no m e r i t i n R y d e r ' s a r g u m e n t t h a t his sales of s e c u r i t i e s in this state were exempt f r o m r e q u i r e m e n t s o f t h e A l a b a m a S e c u r i t i e s A c t by v i r t u e o f § the 8-6- 3(b)(3). Ryder a l s o argues t h a t the t r i a l the default judgment and court erred i n entering i n denying him relief from that judgment b e c a u s e , he s a y s , M a b r y ' s c l a i m s t h a t R y d e r violated the two-year Alabama statute 1975. of securities limitations In p e r t i n e n t p a r t , laws were contained by the i n § 8 - 6 - 1 9 ( f ) , A l a . Code § 8-6-19(f) 17 barred provides: 2080992 "No p e r s o n may o b t a i n r e l i e f u n d e r t h i s s e c t i o n i n an a c t i o n i n v o l v i n g t h e f a i l u r e t o r e g i s t e r u n l e s s s u i t i s b r o u g h t w i t h i n two y e a r s f r o m t h e d a t e o f sale. A l l other actions for relief under this s e c t i o n must be b r o u g h t w i t h i n t h e e a r l i e r o f two y e a r s a f t e r d i s c o v e r y o f t h e v i o l a t i o n o r two y e a r s after discovery should h a v e b e e n made by t h e e x e r c i s e of reasonable care." The t r i a l c o u r t c o r r e c t l y a p p l i e d § 8 - 6 - 1 9 ( f ) t o M a b r y ' s c l a i m under § 8-6-19(a)(1) seeking unregistered recovery f o r Ryder's s e l l i n g of s e c u r i t i e s t o Mabry by f i n d i n g i n f a v o r o f Mabry only with respect to sales of s e c u r i t i e s that occurred within two y e a r s o f t h e d a t e Mabry f i l e d t h i s a c t i o n . The t r i a l court a l s o c o r r e c t l y a p p l i e d § 8 - 6 - 1 9 ( f ) t o M a b r y ' s c l a i m u n d e r § 86-19(a)(2) seeking Mabry by means recovery of untrue f o r Ryder's s e l l i n g s e c u r i t i e s t o statements of material facts; a l t h o u g h t h e t r i a l c o u r t f o u n d i n f a v o r o f Mabry on t h a t claim w i t h r e s p e c t t o s a l e s t h a t o c c u r r e d more t h a n two y e a r s before Mabry f i l e d t h i s a c t i o n , t h e e v i d e n c e e s t a b l i s h e d t h a t Mabry did not discover t h a t R y d e r ' s s t a t e m e n t s were u n t r u e u n t i l d a t e t h a t was w i t h i n two y e a r s o f t h e d a t e Mabry f i l e d action and statements until that were he could untrue by not have discovered the e x e r c i s e that of reasonable a d a t e t h a t was w i t h i n two y e a r s o f t h e d a t e he this action. Accordingly, a this those care filed we f i n d no m e r i t i n R y d e r ' s argument 18 2080992 t h a t the t r i a l c o u r t e r r e d i n a p p l y i n g the two-year s t a t u t e of limitations contained in § 8-16-19(f). F i n a l l y , Ryder argues t h a t t r i a l the default judgment a g a i n s t him court erred i n entering and i n d e n y i n g him relief f r o m t h a t j u d g m e n t b e c a u s e , he s a y s , Mabry f a i l e d t o p r o v e essential However, elements of fair reading a his i n d i c a t e s t h a t the t r i a l with respect fraud of the and trial c o u r t d i d not t o h i s f r a u d and conversion claims. court's judgment f i n d i n f a v o r o f Mabry conversion claims -- the c o u r t f o u n d i n f a v o r o f Mabry o n l y w i t h r e s p e c t t o h i s that Ryder Therefore, had violated § Ryder's f i n a l Because Ryder has 8-6-19(a)(1) argument has failed to the no and § trial claims 8-6-19(a)(2). merit. establish that the trial c o u r t e r r e d i n e n t e r i n g t h e d e f a u l t j u d g m e n t a g a i n s t him o r i n d e n y i n g him of the trial r e l i e f f r o m t h a t j u d g m e n t , we judgment court. APPLICATION FOR 2010, a f f i r m the REHEARING GRANTED; OPINION OF MARCH 12, WITHDRAWN; OPINION SUBSTITUTED; AFFIRMED. Pittman, Thomas, and Thompson, P . J . , Moore, J J . , c o n c u r . concurs i n the 19 r e s u l t , without writing.

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