Huntsville Golf Development, Inc. v. Ratcliff, Inc.

• Decision Date: 02 September 1994
• Citation: 646 So.2d 1334
• Parties: HUNTSVILLE GOLF DEVELOPMENT, INC. v. RATCLIFF, INC., and Marion L. Ratcliff, d/b/a Ratcliff Construction Company. 1930783.
• Court: Alabama Supreme Court

Page 1334

646 So.2d 1334

HUNTSVILLE GOLF DEVELOPMENT, INC. v. RATCLIFF, INC., and Marion L. Ratcliff, d/b/a Ratcliff Construction Company.

1930783.

Supreme Court of Alabama.

Sept. 2, 1994.

Richard E. Dick of Dick & Wisner, P.C., Huntsville, for appellant.

Robert C. Gammons and Charles H. Pullen of Watson, Gammons & Fees, P.C., Huntsville, for appellees.

INGRAM, Justice.

Huntsville Golf Development, Inc. ("Huntsville Golf"), a condominium development corporation, sued Marion Ratcliff and a corporation he controlled, Ratcliff, Inc., also a condominium development corporation (hereinafter together called "Ratcliff"), alleging that Ratcliff had converted certain architectural plans for a group of condominiums near the Huntsville municipal golf course. The trial court entered a summary judgment in favor of Ratcliff; Huntsville Golf appealed.

On a motion for summary judgment, the burden is initially on the movant to make a prima facie showing that there is no genuine issue of material fact (i.e., that there is no dispute as to any material fact), and that the movant is entitled to a judgment as a matter of law. Rule 56, Ala.R.Civ.P.; McClendon v. Mountain Top Indoor Flea Market, Inc., 601 So.2d 957 (Ala.1992); Elgin v. Alfa Corp., 598 So.2d 807 (Ala.1992). "The burden does not shift to the opposing party to establish a genuine issue of material fact until the moving party has made a prima facie showing that there is no such issue of material fact." McClendon, at 958; Elgin, at 810-11.

Rule 56 must be read in conjunction with the "substantial evidence rule," § 12-21-12, Ala.Code 1975, for actions filed after June 11, 1987. See Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797-98 (Ala.1989). In order to defeat a defendant's properly supported motion for summary judgment, the plaintiff must present substantial evidence, i.e., "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989). On review of a summary judgment, this Court reviews the record in a light most favorable to the nonmovant and must resolve all reasonable doubts against the movant. Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So.2d 359 (Ala.1993).

In 1990, Huntsville Golf began to develop a group of condominiums, known as Fairway Hills, near the Huntsville municipal golf course. During the early stages of development, Huntsville Golf commissioned an architect to prepare architectural plans specifically for the Fairway Hills development. Huntsville Golf received a loan from SouthTrust Bank to finance the condominium construction. Pursuant to the loan agreement, the president of Huntsville Golf, Nelson Chatelain, executed a document styled "Assignment of Borrower's Interest in Contract Documents"; the document stated, in part, the following:

"THIS ASSIGNMENT is made on the 13th day of February, 1990, by and from HUNTSVILLE GOLF DEVELOPMENT, INC. ('Borrower') to SOUTHTRUST BANK OF HUNTSVILLE, NATIONAL ASSOCIATION ('Lender');

"WITNESSETH:

"WHEREAS, Borrower is constructing ... a residential condominium project and has requested Lender to provide a Construction Line in the principal amount of Two Million Two Hundred Twenty-Three Thousand and no/100 ($2,223,000.00) Dollars to Borrower to aid in the construction of the Condominium project....

"WHEREAS, Lender has agreed to provide Construction Line, provided among other things, that Borrower executed this instrument of assignment as additional security for the Line.

"NOW, THEREFORE, in consideration of the foregoing, and in order to induce Lender to provide the Construction Line, and as additional collateral security for the Line, Borrower hereby grants, transfers and assigns to Lender, its successors and assigns, all its right, title and interest in and to those certain contracts, agreements and other documents relating to the Fairway Hills Condominium Project (the 'Contract Documents'), described as follows:

"I. Construction contract between [the contractor for the project] and Borrower dated December 18, 1989, in the amount of $3,385,371.00.

"....

"III. Drawings and specifications described in said construction contract...."

(Emphasis added.)

The vice president of SouthTrust's commercial loan department, Rebecca Zugaro, testified that a set of the Fairway Hills architectural drawings was delivered to the bank. Zugaro stated that SouthTrust's retention of the drawings was a standard procedure to ensure the completion of the development if SouthTrust had to finish the project.

In 1991, after building 8 of the proposed 31 condominiums that were to comprise...