McKelvey v. Terry, 83-786

• Decision Date: 28 June 1985
• Docket Number: No. 83-786,83-786
• Citation: 474 So.2d 632
• Parties: DeWayne McKELVEY v. Curtis TERRY and Edna Terry.
• Court: Alabama Supreme Court

Page 632

474 So.2d 632

DeWayne McKELVEY v. Curtis TERRY and Edna Terry.

No. 83-786.

Supreme Court of Alabama.

June 28, 1985.

A. P. Reich, II of Speake, Speake & Reich, Moulton, for appellant.

Don R. White, Moulton, for appellees.

JONES, Justice.

This appeal involves a suit for damages based on improvements which the plaintiff made to property rented from the defendants under an oral agreement. After a trial without a jury, the court determined that the plaintiff was not entitled to relief.

In April 1982 DeWayne McKelvey entered into an oral agreement with Edna and Curtis Terry to rent their commercial property in North Courtland, Alabama. McKelvey wished to operate a laundry and a cafe on the premises. Mrs. Terry initially told McKelvey she wanted to sell the property for $30,000, but he allegedly responded that the property was not worth that much and he only wanted to lease it.

McKelvey's version of the negotiations was that he told the Terrys he would have to invest $10,000 to $12,000 to make the property usable for his laundry and cafe businesses. He allegedly told them that to make an adequate return on this investment, he would have to lease the property for at least five years. According to McKelvey, Mrs. Terry told him to go ahead with his improvements and they would lease the property to him for an indefinite period, long enough for him to recover his investment.

McKelvey made the necessary alterations to the property, installing wiring, plumbing, and other fixtures. He did this work apparently in May 1982 and began operating his business in June or July of that year. He paid rent until October of 1983, when Mrs. Terry informed him she had sold the property and he would have to move out by November 1. He did so and filed this suit on November 7. The complaint included four counts, which we take to state claims for unjust enrichment, implied contract, work and labor done, and fraudulent inducement to enter the lease and make the improvements.

The Terrys answered the complaint by admitting an oral contract but asserting that it was a month-to-month rental and that they refused to enter into a written lease because they wished to sell the property. The answer also raised the Statute of Frauds. In answer to a request for admissions, the Terrys admitted that they told McKelvey he could make alterations to the property but added that they told him he had to do so at his own expense. They denied that the improvements enhanced the value of the property.

The case went to trial on these contentions of the parties. The purchaser testified that the changes made by McKelvey diminished the value of the property rather than enhancing it. The trial court, after receiving written briefs from the parties, entered a judgment which included the following:

"[T]he evidence in this case shows that there was no lease, that the defendants repeatedly declined to sign a lease and in fact informed the plaintiff that the premises were for sale and that should a buyer present himself, the premises would be sold to anyone willing to pay the sale price asked by the defendants.

"The Court finds as a matter of fact and...