Hibbett Sporting Goods, Inc. v. Biernbaum

• Decision Date: 19 December 1980
• Citation: 391 So.2d 1027
• Parties: 1980-81 Trade Cases P 63,755 HIBBETT SPORTING GOODS, INC. v. Ralph BIERNBAUM et al. 79-718.
• Court: Alabama Supreme Court

Page 1027

391 So.2d 1027

1980-81 Trade Cases P 63,755

HIBBETT SPORTING GOODS, INC. v. Ralph BIERNBAUM et al.

79-718.

Supreme Court of Alabama.

Dec. 19, 1980.

J. A. Keller of Keller & Cochran, Florence, for appellant.

George W. McBurney of Poellnitz, Cox, McBurney & Jones, Florence, for appellees.

MADDOX, Justice.

Appellant, Hibbett Sporting Goods, Inc., brought suit to enjoin the appellees from leasing a portion of Regency Square Mall to Athletic Footwear, also referred to as Athlete's Foot. Hibbett had entered into a long-term lease with Biernbaum, one of the appellees, under which Hibbett claimed that the parties had orally agreed that Biernbaum would not lease space in Regency Square Mall to "another sporting goods business or sporting goods store." This Court, on a prior appeal, found that the "oral contract" was enforceable, Hibbett Sporting Goods, Inc. v. Biernbaum, 375 So.2d 431 (Ala.1979), and remanded the case to the trial court for a decision regarding whether the proposed lease to Athlete's Foot would violate that contract.

The trial court, after a bench trial, found:

It is uncontroverted and the court finds further that the defendant Athletic Footwear of Birmingham is engaged in the business of selling sporting goods at its retail establishment in the Regency Square Mall.

The trial court also found, however:

(T)he terms "sporting goods," "sporting goods store," and "sporting goods business," are subject to varying descriptions, definitions, categorization, and understandings in the shopping center, athletic, and sporting goods industries.

That court finally stated:

Agreements of the type relied upon by the plaintiff in this cause are in restraint of trade and, consequently, must be positively expressed and understood.

The trial judge denied Hibbett's request for an injunction.

Basically, three issues are presented in this appeal: (1) whether the trial court erred in failing to enjoin the appellees from continuing to operate a retail sporting goods store in Regency Square Mall; (2) whether the trial court erred in finding that there was no "mutual understanding or meeting of the minds" between the parties in regard to the agreement; and (3) whether the trial court erred in finding that the contract in question was "in restraint of trade."

The trial court found that the contract was in restraint of trade. Because it appears that this contract is not of the type classified as "in restraint of trade," we will dispose of this issue first. Code 1975, § 8-1-1 states:

(a) Every contract by which anyone is restrained from exercising a lawful profession, trade or business of any kind otherwise than is provided by this section is to that extent void.

As this Court stated in Alabama-Tennessee Natural Gas Co. v. City of Huntsville, 275 Ala. 184, 153 So.2d 619 (1963):

In Buckalew v. Niehuss, 249 Ala. 585, 32 So.2d 299, we said:

"It is true that contracts in general restraint of trade violate the policy of the law and are therefore void, but as observed in Terre Haute Brewing Co. v. McGeever, 198 Ala. 474, 73 So. 889:

" ' * * * Every contract, however, which at all restrains or restricts trade, is not void; it must injuriously affect the public weal; that it may affect a few or several individuals engaged in a like business does not render it void. Every contract of purchase and sale to some extent injures other parties; that is, it necessarily prevents others from making the sale or sales consummated by such contract. * * *

" 'Contracts in partial restraint of trade are always upheld, when properly restricted as to territory, time, and persons, where they are supported by sufficient consideration'. * * * "

See also Denton v. Alabama Cotton Co-op. Ass'n, 30 Ala.App. 429, 7 So.2d 504.

275 Ala. at 193, 153 So.2d 619 (emphasis added).

Under the contract, Biernbaum is prevented only from leasing space in Regency Square Mall to another "sporting goods store"; therefore, the contract is sufficiently limited as to time, territory and type of business. The contract obviously is in partial restraint of trade, but because it is sufficiently limited in geographic area and type of business restrained, it is not void.

The issue which is central to a decision in this case is whether or not there was a meeting of the minds between the parties as to the meaning of the term "sporting goods store." The trial court found that the plaintiff Hibbett "failed to carry the burden of reasonably satisfying the court that there was a mutual understanding or meeting of the minds between the parties."

The principal point of dispute between the parties is the meaning of the term "sporting goods" or "sporting goods store." Hibbett contends that items such as shoes, warm-up suits and socks are sporting goods. Biernbaum classifies these as apparel or sportswear. Thus, at first blush, there would appear to be no meeting of the minds between the parties.

Both Hibbett and Biernbaum, however, were experienced in the shopping center field. Hibbett had been in the sporting goods business since 1950, and Biernbaum had been a shopping center developer since 1940. Both men were members of trade associations or, at least, subscribed to trade publications and attended conventions and shows for their particular trade.

The general rule of construction used by this Court is that "words of agreement will be given their...