Alpine Bay Resorts, Inc. v. Wyatt

• Decision Date: 30 September 1988
• Citation: 539 So.2d 160
• Parties: ALPINE BAY RESORTS, INC. v. Gary W. WYATT and Nancy K. Wyatt. 87-715.
• Court: Alabama Supreme Court

Page 160

539 So.2d 160

ALPINE BAY RESORTS, INC. v. Gary W. WYATT and Nancy K. Wyatt.

87-715.

Supreme Court of Alabama.

Sept. 30, 1988.

Rehearing Denied Jan. 16, 1989.

Kenneth Lee Cleveland of Cleveland & Cleveland, Birmingham, for appellant.

Julian M. King, Talladega, for appellees.

JONES, Justice.

Alpine Bay Resorts, Inc., the developer of a vacation resort on Logan Martin Lake in Talladega County, appeals from a judgment based upon a jury verdict awarding Gary W. Wyatt and Nancy K. Wyatt $25,000 on their claim alleging that Alpine fraudulently misrepresented and breached the terms of a condominium timeshare plan and charter membership contract at the resort.

In May 1983, the Wyatts contracted with Alpine's marketing agent to purchase a fee simple interest in an Alpine condominium for one week during a designated season. The Wyatts testified that the selling agent represented that they would receive a "fixed" week each year during March to use the condominium; Alpine countered by arguing that although the Wyatts contracted for a predetermined "floating" week during a designated season, they had to "reserve" the week in advance according to the terms of the contract. In other words, Alpine alleges that the Wyatts were not guaranteed the specific week in March, but were guaranteed only the right to reserve the week in the designated season, subject to availability.

The Wyatts testified that, under the terms of the charter membership program at Alpine, they were promised that all fees for playing golf (greens and cart fees) would be discounted 30% for weekday play and 15% for weekend play, regardless of any special rates run by the golf course, and that the discount applied to their guests. The Wyatts allege that Alpine then refused to apply the charter member discount when special rates were run at the course and refused to give their guests the discount. Alpine asserted that the Wyatts received their golf discount, but that the charter membership did not require Alpine to discount a special rate or apply the discount to charter members' guests. Alpine's golf professional testified that she refused to give Mr. Wyatt the discount on days when a special rate was in effect and refused to discount golf fees for his guests.

After attempting to reserve their "fixed" week at the resort and being told that the condominium was not available at that time, the Wyatts ceased payment on the timeshare contract and sued Alpine. Alpine counterclaimed for the balance due on the contract. The trial court rendered judgment on a jury verdict in the Wyatts' favor on the claim and the counterclaim and denied Alpine's motion for judgment notwithstanding the verdict or, alternatively, for new trial.

The primary issue for review is whether the trial court, with respect to the Wyatts' fraud and breach of contract claims, erred in denying Alpine's alternative motion for JNOV on the sufficiency-of-the-evidence ground or for a new trial on the weight-of-the-evidence ground. ¹ The standard of review applicable to a motion for JNOV is identical to the standard used by the trial court in granting or denying a directed verdict motion initially. Turner v. Peoples Bank of Pell City, 378 So.2d 706 (Ala.1979). Granting a motion for JNOV is proper "only where there is a complete absence of proof on a material issue or where there are no controverted questions of fact on which reasonable people could differ" and the moving party is entitled to judgment as a matter of law. Deaton, Inc. v. Burroughs, 456 So.2d 771 (Ala.1984).

But where they are unchallenged on a sufficiency-of-the-evidence ground, or when the evidence meets the "sufficiency" test, jury verdicts are presumed correct, and this presumption is strengthened by the trial court's denial of a motion for new trial. Therefore, a judgment based upon a jury verdict and sustained by the denial of a post-judgment motion for a new trial, will not be reversed on a weight-of-the-evidence ground unless it is "plainly and palpably" wrong. Ashbee v. Brock, 510 So.2d 214 (Ala.1987). See, also, Jawad v. Granade, 497 So.2d 471 (Ala.1986).

I

Our recent cases hold, generally, that a purchaser is not authorized to disregard the express terms of a written contract and rest a claim on fraud, claiming only that he relied on a statement contrary to the contract terms. The purchaser's reliance upon a contrary statement, even if the statement is false, must be "reasonable" under the circumstances, before the law will require the speaker to respond in damages for fraud. Webb v. Reese, 505 So.2d 321 (Ala.1987). See, also, Traylor v. Bell, 518 So.2d 719 (Ala.1987); Turner v. Landmark Chevrolet, Inc., 514 So.2d 1337 (Ala.1987); and Hinson v. Center Court Productions, 514 So.2d 1374 (Ala.1988).

In Syx v. Midfield Volkswagen, Inc., 518 So.2d 94 (Ala.1987), a representative of Midfield Volkswagen prepared the plaintiff's documents of sale for the purchase of a pick-up truck and his application for automobile insurance, which clearly showed that only "comprehensive and collision" coverage was applied for. Although he was given the opportunity, the plaintiff did not read the insurance application prior to signing it and did not read the policy when it was delivered by mail. Following an accident five months after the purchase, the plaintiff discovered that the policy did not include liability coverage. He claimed fraud, because, he said, Midfield Volkswagen's representative told him at the time he purchased the truck that he was applying for "full coverage," including liability coverage.

In affirming the summary judgment for Midfield Volkswagen, we found that five months was sufficient time for the plaintiff to have discovered that he did not have liability coverage and that he had made a conscious decision not to read the application or his policy. Therefore, we held, as a matter of law, that because the policy put the plaintiff on notice that he did not have liability coverage, his failure to exercise "any degree of precaution to safeguard his interests" rendered his reliance on any statement to the contrary by Midfield Volkswagen's representative "unreasonable." Syx, 518 So.2d at 97-99.

In deciding whether the Wyatts' reliance on Alpine's representations was reasonable, we are guided by Torres v. State Farm Fire & Cas. Co., 438 So.2d 757 (Ala.1983), which was followed by Syx and the related cases cited above:

"Because it is the policy of courts not only to discourage fraud but also to discourage negligence and inattention to one's own interests, the right of reliance comes with a concomitant duty on the part of the plaintiffs to exercise some measure of precaution to safeguard their interests. In order to recover for...