Clark v. Jim Walter Homes, Inc., Civ. A. No. 88-T-1117-S.

• Decision Date: 18 April 1989
• Docket Number: Civ. A. No. 88-T-1117-S.
• Citation: 719 F. Supp. 1037
• Parties: Wavie C. CLARK, et al., Plaintiffs, v. JIM WALTER HOMES, INC., Defendant.
• Court: U.S. District Court — Middle District of Alabama

719 F. Supp. 1037

Wavie C. CLARK, et al., Plaintiffs, v. JIM WALTER HOMES, INC., Defendant.

Civ. A. No. 88-T-1117-S.

United States District Court, M.D. Alabama, S.D.

April 18, 1989.

John L. Knowles, Kelly & Knowles, Charles W. Fleming, Jr., Lee & Fleming, Geneva, Ala., for plaintiffs.

Richard H. Gill, Lee H. Copeland, Copeland, Franco, Screws & Gill, Montgomery, Ala., for defendant.

ORDER

MYRON H. THOMPSON, District Judge.

In this case plaintiffs Wavie C. Clark and Jerelene Clark sue defendant Jim Walter Homes, Inc. on a variety of theories, all relating to the purchase of a house by the Clarks from Jim Walter Homes in 1983. The matter is presently before the court on Jim Walter Homes's January 18, 1989, motion for summary judgment as to all counts. For the reasons that follow, this motion is due to be granted in part and denied in part.

FACTUAL BACKGROUND

Jim Walter Homes and the Clarks entered into an agreement in February 1983 for the construction of a house in the city of Geneva, Alabama. The Clarks allege that the parties entered into a construction contract and a separate contract in which the Clarks signed a promissory note and mortgage, with Jim Walter Homes as mortgagee, in return for the house. Apparently Jim Walter Homes only partially constructs houses in many of the contracts into which it enters, although the parties in this case allegedly agreed that Jim Walter Homes would fully complete the house for the Clarks.

The Clarks apparently closely monitored the construction of their future home and were dissatisfied with Jim Walter Homes's performance of the contract early in their relationship. They allege that, since the completion of the contract, numerous repairs have been necessary, some of which Jim Walter Homes has performed, or attempted to perform. The instant suit was filed by the Clarks in Geneva County Circuit Court in January 1987. Jim Walter Homes, a Florida corporation, removed the case to this court under 28 U.S.C.A. §§ 1332, 1441(a) as a foreign defendant.

The Clarks lodge seven counts for relief against Jim Walter Homes, traveling on four general legal theories: breach of contract, breach of warranty, fraud and the tort of outrage. Jim Walter Homes moves for judgment in its favor as to all of these claims, arguing that no genuine issues of material fact are in dispute in the case and that it is entitled to judgment as a matter of law. The court finds that judgment is due Jim Walter Homes as to the charges of breach of contract, outrage and breach of warranty under the Magnuson-Moss Warranty Act, 15 U.S.C.A. § 2301 et seq., but that the state law warranty and fraud claims survive summary judgment. The court will group the Clarks' various counts together by legal theory for the purpose of disposing of this motion.

BREACH OF CONTRACT CLAIMS

The Clarks charge Jim Walter Homes with breach of both the construction contract and the contract involving the promissory note and mortgage. As to the construction contract, the Clarks contend that Jim Walter Homes materially varied from the plans and specifications for the house as contained in the contract. In his deposition, Wavie Clark detailed a number of areas, relating to both workmanship and faulty materials, in which he found Jim Walter Homes's performance of the contract deficient. As to the mortgage contract, the Clarks allege that the contract should be ruled null and void on the grounds of inadequate consideration. In their response to the motion for summary judgment, the Clarks further suggest that Jim Walter Homes breached the mortgage contract in the same manner in which it breached the construction contract — by failing to build the house according to the parties' agreed upon specifications.

In its brief supporting its motion, Jim Walter Homes challenges count one of the Clarks' complaint, breach of the construction contract, on the grounds that Wavie Clark signed a release extinguishing the Clarks' claim on this theory. The parties signed both the construction contract and the mortgage contract on February 17, 1983. In documents filed in support of its motion, Jim Walter Homes includes a "completion slip" indicating the completion of construction on April 22, 1983. Wavie Clark signed this document and apparently dated it May 12, 1983. The document contains the following language.

WARNING TO BUYER DO NOT SIGN THIS CERTIFICATE UNTIL ALL SERVICES HAVE BEEN SATISFACTORILY PERFORMED AND MATERIALS SUPPLIED OR GOODS RECEIVED AND FOUND SATISFACTORY

This is to advise that the home which I purchased from Jim Walter Homes, Inc., has been built according to contract and the work completed to my satisfaction. I have inspected the house thoroughly and hereby advise you that there is no further work to be done nor any materials or fixtures to be supplied and that Jim Walter Homes, Inc., has fulfilled its building contract.

Jim Walter Homes asserts that this document operates as a release under Alabama law, thus barring the Clarks' cause of action for breach of the construction contract.

By § 12-21-109 of the 1975 Code of Alabama, the court is to construe this release according to its terms and the revealed intentions of the parties. "Where no ambiguity exists, the Court's only function is to interpret the lawful meaning and intentions of the parties as found within the agreement and to give effect to them." Trimble v. Todd, 510 So.2d 810, 812 (Ala.1987) (per curiam). See generally Alabama Farm Bureau Insurance Co. v. Hunt, 519 So.2d 480 (Ala.1987) (per curiam). The court finds the document signed by Wavie Clark to be clear and unambiguous in its language. The import of the document is that the Clarks deemed the construction contract performed and waived their right to sue for breach under that contract. The Clarks have not attempted to raise any defenses to the release, nor indeed have they addressed the issue of the release at all in the record of this case. Where the language and import of a release is unambiguous and the signing party presents no reason as to why the release should not be given legal effect, the issue is appropriate for resolution on summary judgment. See Jehle-Slauson Construction Co. v. Hood-Rich, Architects and Consulting Engineers, 435 So.2d 716 (Ala.1983) (affirming lower court's grant of summary judgment based on release of claims); see also Grimes v. Liberty National Life Insurance Co., 514 So.2d 965 (Ala.1987) (discussing various potential defenses); 1975 Code of Ala. § 8-1-23 (1984) (written release need not be supported by consideration). Therefore, the court concludes that judgment in favor of Jim Walter Homes is due with respect to count one of the Clarks' complaint.

The court further finds that this release dooms count seven of the complaint, the count relating to the mortgage contract. The Clarks present two different theories supporting their claim relating to this contract. The first theory appears in the complaint, where the Clarks seek nullification of this contract by the court on the grounds of inadequate consideration, due to the low value of the house constructed. They assert that the house "was in no wise valued at the amount of said note and mortgage."

Under settled Alabama law, the alleged inadequacy of Jim Walter Homes's consideration cannot, in and of itself, support an action for nullification of the contract.

The rule is too well settled, even to admit of argument, that consideration in fact bargained for is not required to be adequate in the sense of equality in value. The mere inadequacy, alone, is never sufficient to vitiate a contract ... otherwise valid, and the courts are not disposed to enter upon nice calculations to strike a balance on the one side or the other. Absolute equality is not to be hoped for, and is seldom attained in men's dealings one with the other.

Marcrum v. Embry, 282 So.2d 49, 54 (Ala. 1973) (citations omitted). See also Seier v. Peek, 456 So.2d 1079, 1082 (Ala.1984).

In a case presenting facts substantially equivalent to those in this case, indeed involving mortgage and construction contracts entered into by Jim Walter Homes, the Alabama Supreme Court ruled that plaintiffs could not rely on an assertion of inadequate consideration to avoid their obligations under the mortgage. Colburn v. Mid-State Homes, Inc., 266 So.2d 865, 871 (Ala.1972). The court did note that the plaintiffs in Colburn "do not complain that Jim Walter Homes failed to construct the same type of house as selected by them, or that the workmanship was faulty, or that they did not receive exactly what they bargained for in every respect." Id. In this case, on the contrary, the Clarks do make such complaints, leading to the second theory proffered by the Clarks in support of count seven.

The Clarks contend in their brief opposing summary judgment that Jim Walter Homes breached the mortgage contract as well as the construction contract in failing to build the house according to agreed upon plans and specifications. However, just as the Clarks ignore Jim Walter Homes's reliance on the release with respect to count one, they have not explained to the court how their breach claim in count seven, if premised on breach of the construction contract, can survive the effect of the release under § 12-21-109. Therefore, under either theory presented by the Clarks, inadequate consideration or breach of the construction contract, it appears to the court that judgment is due Jim Walter Homes on count seven.

WARRANTY CLAIMS

The Clarks also assert three counts of breach of warranty against Jim Walter Homes. First, the Clarks allege in count two of their complaint that Jim Walter Homes breached implied warranties of fitness for a particular purpose and merchantability under Alabama law. In count three, the Clarks allege breach of express warranty under Alabama law, and in count four they assert a cause of action for breach of warranty under the Magnuson-Moss Warranty Act, 15 U.S.C.A. § 2301...