Kirkpatrick Concrete Co., Inc. v. Birmingham Realty Co., Inc.

• Decision Date: 03 April 1992
• Citation: 598 So.2d 796
• Parties: KIRKPATRICK CONCRETE COMPANY, INC. v. BIRMINGHAM REALTY COMPANY, INC. 1902016.
• Court: Alabama Supreme Court

Page 796

598 So.2d 796

46 A.L.R.5th 831

KIRKPATRICK CONCRETE COMPANY, INC. v. BIRMINGHAM REALTY COMPANY, INC.

1902016.

Supreme Court of Alabama.

April 3, 1992.

John R. Frawley, Jr., Irondale, for appellant.

Drayton N. James of Clark & James, Birmingham, for appellee.

MADDOX, Justice.

The issue in this case is whether a supplier of materials for the construction of a building on leased premises submitted substantial evidence that the landlord was equitably estopped from denying that the supplier has a lien on the land for the payment of the materials furnished. The trial court entered a summary judgment in favor of the landlord. We reverse and remand.

Some of the basic facts are not in dispute. Birmingham Realty Company, Inc. ("Birmingham Realty"), owned the land that is the subject of the controversy. It had leased the land for a five-year term to Walker Norris and Robert Webb. Norris and Webb subsequently assigned their rights under the lease to Ms. M.A. Spradlin. Under the terms of the assignment, Ms. Spradlin agreed to assume all obligations and conditions set out in the lease and to be bound by them. One of the provisions of the lease read as follows:

"The lessee will not make or permit to be made any alterations, additions, improvements or changes in the premises ... without the written consent of the lessor before work is contracted or let."

Ms. Spradlin and her husband, David Spradlin, were using the land to operate a business known as Spradlin Auto Parts. David Spradlin contracted with Kirkpatrick Concrete Company, Inc. ("Kirkpatrick"), to supply concrete for the construction of a building on the leased land. It is undisputed that Kirkpatrick had no knowledge that the land was leased at the time.

On January 26, 1988, Kirkpatrick filed a mechanic's lien for $18,003.97 against the land, and on February 4, 1988, Kirkpatrick sued David Spradlin, M.A. Spradlin, Walker Norris, Robert Webb, and Birmingham Realty for damages arising out of the contract under which it supplied the materials.

On May 4, 1989, the trial court entered a summary judgment in favor of Kirkpatrick and against David Spradlin, in the amount of $19,522.86. On June 10, 1991, the court entered a summary judgment against Kirkpatrick and in favor of Birmingham Realty, ¹ and entered findings and conclusions in a written order.

Kirkpatrick appeals from the summary judgment entered on behalf of Birmingham Realty, ² claiming that the trial court erred because, Kirkpatrick says, it presented substantial evidence that Birmingham Realty was equitably estopped to deny the existence of the lien.

Birmingham Realty's argument that it was entitled to a summary judgment is based on its claim that the evidence shows that it was unaware of the construction of the building until November 1987 and that the president of Birmingham Realty, Russell M. Cunningham III, immediately notified the Spradlins that the construction had been taking place without Birmingham Realty's knowledge and consent and that the building should be removed by the expiration of the lease in January 1988.

In opposition to Birmingham Realty's motion for summary judgment, Kirkpatrick submitted an affidavit of David Spradlin, who stated, in part:

"My name is David Spradlin. I occupied the subject property during the construction in question. Before construction started, I talked with Russell Cunningham of Birmingham Realty, Inc., with my wife and informed him that I was going to build the building on the subject property. He told me to build the building at my own expense and my rent would not increase, and he would reimburse me for my expenses for improvements.

"During the construction, Russell Cunningham came to the premises and observed the Kirkpatrick trucks which were there unloading concrete, and at that time approved of the construction."

It is apparent, based on the Spradlin affidavit, that the question of Birmingham Realty's knowledge of the construction was disputed.

In entering the summary judgment, the trial judge wrote the following:

"Ordinarily, when improvements are erected on unimproved property by the tenant, the person furnishing labor or materials to such improvement is only entitled to a lien against the unexpired term of the lease. He is not entitled to a lien on the freehold. See, e.g., § 35-11-212(a), Alabama Code 1975; Harden v. Wood Lumber Co., 235 Ala. 310, 178 So. 540 (1938). In the last cited case, the supreme court stated in part in its opinion:

" 'But § 8832, Code [1923], confers a lien on the improvements and on the land. This cannot extend to the land of one who has not authorized the improvement, nor to the improvement on the land of such a one, unless it is made by a lessee not prohibited by the lease and under circumstances when the law creates a lien. First Avenue Coal & Lumber Co. v. McWilson, [182 Ala. 276, 62 So. 531 (1913) ]. The lien then does not extend to the freehold, but only to the improvement and the leasehold.' "

The trial judge also set forth in his opinion an accurate account of the applicable law:

"In order to establish liability on the part of Birmingham Realty, it is necessary to establish by evidence either that Birmingham Realty by an authorized agent itself contracted for the labor and improvements furnished to its property or that the conduct of Birmingham Realty was such as to give rise to an estoppel against Birmingham Realty which now prevents it from denying that Kirkpatrick has a valid lien against its property.

"Obviously, there is no evidence that Birmingham Realty itself ever contracted either through Spradlin or any other agent for the materials furnished by Kirkpatrick to its property.

"The elements necessary to establish equitable estoppel are set out in the opinion of the Supreme Court of Alabama in Mazer v. Jackson Ins. Agency, 340 So.2d 770 (Ala.1976). In that case, certain real estate developers sought annexation of their property by Mountain Brook, which was opposed [by] nearby residential owners. The developers gave written assurance to homeowners that the buffer zone of 100 feet along the western and southern portion of the tract would be established not subject to change unless ninety percent of the homeowners agreed. Following the development of the property, the developers first had the buffer zone rezoned from Residential to Office Park and then announced plans to construct an addition to the office building on the area set aside as the buffer zone.

"Reversing the decision of the trial court, which refused to grant relief to the homeowners, the Supreme Court of Alabama concluded that the developers were estopped from developing the buffer zone in any manner inconsistent with the representations and assurance previously made by the developers. In referring to the elements of equitable estoppel, the supreme court quoted with approval the following:

" 'An estoppel ... has three important elements. The actor, who usually must...