Major Millworks, Inc. v. MAE Hardwoods, Inc.

• Decision Date: 12 June 2015
• Docket Number: 2130304.
• Citation: 187 So.3d 714
• Parties: MAJOR MILLWORKS, INC., and Roy F. Roddam, Sr. v. MAE HARDWOODS, INC., d/b/a American Hardwoods, Inc.
• Court: Alabama Court of Civil Appeals

187 So.3d 714

MAJOR MILLWORKS, INC., and Roy F. Roddam, Sr.

v.MAE HARDWOODS, INC., d/b/a American Hardwoods, Inc.

2130304.

Court of Civil Appeals of Alabama.

June 12, 2015.

James R. Morgan, Birmingham, for appellants.

Joel L. DiLorenzo of The DiLorenzo Law Firm, LLC, Birmingham, for appellee.

DONALDSON

, Judge.

MAE Hardwoods, Inc., d/b/a American Hardwoods, Inc. ("MAE Hardwoods"), filed a complaint against Roy F. Roddam, Sr. ("Roddam"), and Major Millworks, Inc. ("Millworks"), in the Shelby Circuit Court ("the trial court") seeking damages for breach of contract. Following a trial, the trial court entered a judgment against Roddam and Millworks, awarding damages that included attorney fees. Roddam and Millworks appeal. Because the record does not contain evidence to support MAE Hardwoods' claim against Roddam or the award of attorney fees pursuant to the contract at issue, we reverse those portions of the judgment. We affirm all other portions of the judgment.

Facts and Procedural History

MAE Hardwoods is a manufacturer of custom wooden building materials. The owner and president of MAE Hardwoods is Kerry Mason. Through an agreement ("the purchase agreement") dated March 19, 2006, Mason purchased the assets of American Hardwoods, Inc., a company undergoing liquidation in bankruptcy proceedings. The purchase agreement specified that the assets purchased by Mason included the goodwill of American Hardwoods, Inc., and the right to use the name "American Hardwoods." Mason then formed a new corporation, MAE Hardwoods, Inc. Thereafter, MAE Hardwoods, Inc., conducted business using the name "American Hardwoods." Mason testified that MAE Hardwoods, Inc., had acquired his interests in American Hardwoods, Inc., including the right to use the name "American Hardwoods."

Millworks is a company located in Alabama that provides services and goods for homebuilding projects. In 2006, MAE Hardwoods supplied materials to Millworks, and Millworks paid the invoices for those materials. In 2009, MAE Hardwoods delivered materials to a building project in Gadsden where Millworks was performing work for the property owner and the builder. A statement dated February 5, 2010, lists a number of invoices billed to Millworks and Roddam, partial payments for those invoices made by Millworks, and finance charges for incomplete payment, reflecting a total amount due of $25,533.16.

On March 9, 2011, MAE Hardwoods filed a complaint in the trial court seeking damages against Roddam and Millworks for breach of contract. MAE Hardwoods did not allege any other grounds for relief. MAE Hardwoods attached copies of the invoices billed to Millworks and Roddam in 2009 and a document it asserted was a contract between all of the parties ("the contract"). The invoices were sent to Millworks on the letterhead of "American Hardwood, Inc.," and the contract contained the same name. MAE Hardwoods alleged that it had entered into the contract in 2006 with Roddam and Millworks and that, pursuant to the contract, MAE Hardwoods agreed to extend a line of credit to Roddam and Millworks for supplied materials. MAE Hardwoods alleged that Roddam and Millworks breached the contract by failing to pay for materials, and it sought the unpaid amounts of the invoices. MAE also sought late fees, interest, and attorney fees pursuant to the terms of the contract.

The contract contained the following statements and terms of agreement:

"STATEMENT: Purchase of goods will indicate the acceptance of American Hardwoods, Inc. credit terms. American Hardwoods, Inc. terms are as follows: The entire Invoice amount is due in full by the 10th day of the month following the month of Invoice.... If the account is not paid according to our terms, the amount is past due and in default, and a late charge or finance charge of 1.5% will be assessed to these invoices at the end of the month when statements are run. The 1.5% finance/service charge results in an annual percentage rate of 18%....

"STATEMENT: Purchases and/or deliveries are herewith authorized to be made without signature.

"....

"STATEMENT: In the event this account is placed in the hands of an attorney for collection, or suit is instituted to collect same or any portion thereof, I and/or we agree and promise to pay all attorney collection fees and court costs and hereby waive all rights of exemption under the laws of the State of Alabama or any other state of the United States.

"....

"STATEMENT: In consideration of credit being extended by American Hardwoods, Inc. to me/us/it, and/or we certify the truthfulness and veracity of the statement appearing on the application and agreement, and I and/or we guarantee and bind ourselves to the faithful payment of all amounts owed, now or in the future by me, us, either of us or any other person, firm, or corporation for our benefit. If credit is extended to a corporation in which we, either of us, or I am an officer, shareholder, employee, or in which an interest exist, I and/or we will personally and faithfully guarantee the payment of all credit extended to said corporation."

The contract is dated July 25, 2006, and is signed by Roddam. The record does not indicate that Roddam received any monetary compensation for signing the contract.

On May 26, 2011, Roddam and Millworks filed an answer denying the allegations of the complaint. MAE Hardwoods filed a motion for a summary judgment on May 11, 2012, and a renewed motion for a summary judgment on March 14, 2013. Roddam and Millworks responded to both motions, arguing in part that the only party entitled to enforce the contract was the company in bankruptcy proceedings named "American Hardwoods, Inc.," and not MAE Hardwoods, Inc. On April 2, 2013, the trial court denied the motions for a summary judgment.

The trial court conducted a bench trial over three days in 2013. The trial court heard testimony from Mason and Hope Roddam, an employee of Millworks. Mason testified that he purchased the use of the name "American Hardwoods" as a part of the overall purchase of the assets of a company in bankruptcy proceedings because the name was well known. Mason testified that he then formed MAE Hardwoods, Inc., and that, by July 2006, MAE Hardwoods, Inc., was doing business as "American Hardwoods, Inc." He testified that MAE Hardwoods entered into the contract using the name "American Hardwoods, Inc."

Hope is Roddam's daughter-in-law. She testified that Roddam's role in Millworks was only as a passive investor and that he had acquired the company in 2006 and had sold it to his son and her a year later. She testified that Roddam had signed a credit application to receive deliveries of materials for a building project in 2006 that was unrelated to the 2009 project in Gadsden. She testified that Roddam had not had any involvement with Millworks for several years by 2009 and that he did not have any involvement with MAE Hardwoods, the property owner, or the builder for the project in Gadsden in 2009.

Hope testified to Millworks' involvement in the building project in Gadsden. Millworks had installed doors and windows, which were not provided by MAE Hardwoods. Hope testified that she had contacted MAE Hardwoods after the builder and the property owner had become interested in specific types of moulding. She testified that she had allowed the decorator and the homebuilder to make the decisions regarding the moulding without her involvement. She testified that, to her knowledge, the homebuilder had ordered the materials from MAE Hardwoods. She testified that she did not place the orders and that she could not find a copy of the invoices in Millworks' records.

Mason testified that, in 2009, Millworks ordered and took possession of the materials supplied by MAE Hardwoods. Mason testified that Hope had placed the first order and had provided him with the directions to the location in Gadsden. He testified that he had been present for the first delivery to the Gadsden site and that he had met a Millworks representative during the delivery. Mason testified that he had contacted Millworks two or three times when the invoices were not paid and that Millworks had responded by making two partial payments of a thousand dollars each.

On August 21, 2013, the trial court entered a judgment in favor of MAE Hardwoods, finding that the parties had entered into an enforceable contract on July 25, 2006, pursuant to which MAE Hardwoods supplied building materials to Millworks. The trial court found that Roddam and Millworks breached the contract by failing to timely pay invoices totaling $25,533.16. The judgment awarded MAE Hardwoods the amount of the unpaid invoices and 18% percent interest on the unpaid balance, as provided for in the contract, in the amount of $13,787.90. The judgment also awarded attorney fees as follows:

"The contract expressly calls for [Roddam and Millworks] to pay attorney fees and court costs if any balance is placed in the hands of an attorney for collection or suit is instituted. Accordingly, the Court awards a reasonable attorney fees to [MAE Hardwoods] in the amount of $7,500.00."

The total judgment amount is $46,821.06. On September 20, 2013, Roddam and Millworks filed a motion to alter, amend, or vacate judgment, and for other relief, asserting over 60 grounds that included the following arguments: 1) MAE Hardwoods lacked standing because it was not a party to the contract, 2) the trial court's findings were manifestly against the weight of the evidence, and 3) MAE Hardwoods failed to submit evidence to support the award of attorney fees and interest. After conducting a hearing, the trial court denied the postjudgment motion on November 26, 2013. On January 7, 2014, Roddam and Millworks filed a timely notice of appeal to this court.

Standard of Review

We apply the following standard of review:

"When evidence is presented ore tenus, the trial court is ‘ "unique[ly] position[ed] to directly observe the witnesses and to assess their demeanor and credibility." ’ Ex parte T.V.

...