[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
OCT 19, 2006
No. 05-10117
THOMAS K. KAHN
________________________
CLERK
D. C. Docket No. 02-00707 CV-PT-M
SAMARA CONSULTANT GROUP,
a corporation, A.M. SAMARA,
Plaintiffs-Counter-
Defendants-Appellees,
versus
S & DAVIS INTERNATIONAL, INC.,
Defendant-Counter-
Claimant-Appellant,
ROY DAVIS,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
_________________________
(October 19, 2006)
Before ANDERSON and DUBINA, Circuit Judges, and VINSON,* District Judge.
PER CURIAM:
Appellants, Roy Davis and Strickland & Davis International DISC
Corporation appeal the judgment of the district court against them. Several
concerns persuade us that the judgment of the district court should be vacated and
this case remanded to the district court for further proceedings.
First, we are concerned as to whether appellants were afforded a fair
opportunity to defend against the imposition of a constructive trust as the recipient
of a fraudulent or otherwise wrongful transfer. It appears to us that the district
court in its November 17, 2004, order simultaneously vacated its prior orders
dismissing these parties from the case and entered judgment on the merits against
them. We are concerned that the due process considerations articulated in Nelson
v. Adams USA, Inc., 592 U.S. 460, 120 S.Ct. 1579 (2000), may have been
transgressed. In any event, we conclude that fairness requires that these appellants
be afforded a fair opportunity to be put on notice of the claim against them, adduce
evidence to defend against it, and submit both factual and legal arguments to the
district court in their defense.
*
Honorable C. Roger Vinson, United States District Judge for the Northern District of
Florida, sitting by designation.
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Second, we are concerned that the district court never explained its rationale
for setting aside the previous judgments against appellants. Such decision and
rationale should precede the resolution of the merits of any claim against
appellants.
Third, the Alabama law with respect to precisely what conduct will warrant
the imposition of a constructive trust is not clear to this panel in light of the
current briefing. Although far from clear, the magistrate judge implied that a
constructive trust may be warranted even in the absence of a fraudulent
conveyance or other wrongful conduct. If it were necessary to so hold, this court
may well deem it appropriate to certify that question to the Alabama Supreme
Court. However, such certification would be inappropriate unless we knew that
resolution of that question were absolutely necessary to resolve this case.
Accordingly, if the district court on remand imposes a constructive trust on either
or both appellants, the district court should describe fully the nature of the conduct
which warrants imposition of the constructive trust, as well as the court’s rationale
and authority for doing so.
Although we have determined that it is necessary to remand this case for
further proceedings, and for elaboration by the district court, our actions should
not be construed as expressing any opinion on the merits. To the contrary, we
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express absolutely no opinion on the merits of any issue or on the appropriate
result for the case.
Accordingly, the judgment of the district court is
VACATED and REMANDED.
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