Reed v. Herren

Decision Date24 September 1982
Citation423 So.2d 139
Parties1982-83 Trade Cases P 65,126 Dock REED and Highland Racquet Club, Inc. v. Wade HERREN. 80-337.
CourtAlabama Supreme Court

William M. Acker, Jr. and Susan D. Doughton of Dominick, Fletcher, Yeilding, Acker, Wood & Lloyd, Birmingham, for appellants.

Joseph B. Mays, Jr. and Jere F. White, Jr. of Bradley, Arant, Rose & White, Birmingham, for appellee.

ALMON, Justice.

This is a contract case which involves a covenant not to compete and a cross claim alleging breach of warranty.

On July 1, 1974, Wade Herren entered into an agreement with the City of Birmingham whereby Herren was awarded the exclusive license to operate a tennis facility known as the Highland Racquet Club. The agreement was to terminate on June 30, 1979. It was amended May 28, 1976, but the termination date was not changed. In 1977, Dock Reed approached Herren about the possibility of Reed's taking over the tennis shop at Highland. Herren and Reed reached an agreement (hereafter Herren/Reed agreement) which was formalized on July 1, 1977. Under this agreement, Herren sold to Reed and his corporation, Highland Racquet Club, Incorporated (hereafter HRC), the exclusive right to occupy and operate the tennis shop at Highland and also certain assets located at the tennis shop. The total sales price was $36,773.07, which included $25,000 for assets such as counters (show cases), mannequins, racquet repair and stringing equipment and other tennis shop supplies. Herren warranted that he had good and marketable title to the business and assets sold, but included a provision in the agreement that should the City claim any of the wooden show cases sold to Reed, then Herren would pay to Reed the depreciated value of such cases.

It was expressly provided in the agreement that neither Reed nor HCR would "obtain or attempt to obtain any agreement from the City covering any of the rights, privileges and licenses granted to Herren" by the City, "it being understood that as between the parties hereto, Herren shall have the first right to obtain such rights, licenses and privileges from the City." This provision was to remain in effect until June 30, 1987, or thereafter until the expiration of any license agreement Herren had with the City.

Herren was to receive three-fourths of the rental fees received from the rental of courts, lockers, etc., while Reed was to receive the remaining one-fourth.

In November 1978, Reed wrote to Herren and suggested that they become partners and split the fees earned at Highland. Herren responded by letter to Reed that he realized that things had not worked out "profit-wise" as perhaps Reed had expected, but he did not need or want a partner. Reed wrote Herren again on December 27, 1978, and stated that he had to have a better financial arrangement to continue the agreement. Reed again suggested splitting the fees with Herren, and offered to shoulder all of the responsibility for running the facility. If that was not agreeable then he felt Herren should repurchase the inventory, fixtures and goodwill.

Reed wrote a third letter to Herren on April 23, 1979. The letter stated that Herren's failure to perform his responsibilities under the contract made it impossible to continue with the agreement, and therefore he considered the agreement breached. Herren wrote back to Reed on May 25, 1979, saying their contract was still valid and not due to expire for several years. Herren also included two proposals to Reed that were essentially the same as the ones Reed had mentioned in his December 27, 1978, letter.

On June 4, 1979, Herren wrote Reed withdrawing the proposals. The next day he wrote Reed stating Reed had breached their agreement by dealing with the City and competing for the license to run Highland. On May 31, 1979, both Herren and Reed appeared at a public meeting held by the Birmingham Park and Recreation Board regarding the award of the Highland license. Both Reed and Herren submitted proposals to the Board. These were the only proposals submitted. The Board awarded the new license to Reed and HRC.

Herren initiated the present suit claiming breach of contract and sought damages and injunctive relief. Reed moved for a summary judgment, alleging that the agreement was void under Code 1975, § 8-1-1. The trial court denied the motion. HRC also asserted a counterclaim based on Herren's breach of warranty in the sale of certain tennis shop assets. The trial court, sitting without a jury, and after hearing evidence, entered a judgment finding Reed and HRC had breached the agreement by seeking and obtaining the license from the City; that Herren was not guilty of any prior breach of the agreement; that the noncompetition provisions did not violate § 8-1-1; that HRC's counterclaim was due to be denied; that injunctive relief was due to be denied; and that Herren was due damages in the amount of $24,514 due to loss of profits resulting from the breach of the agreement.

Before we get to the primary errors asserted we must dispose of a motion to dismiss the appeal as untimely filed.

The final judgment was entered by the trial court on November 16, 1980. Rule 59(b) of the Alabama Rules of Civil Procedure required that a motion for a new trial be served not later than 30 days after the entry of a judgment. 1 The thirtieth day or last day to file 2 a motion for a new trial fell on December 26, 1980, which was the day after Christmas. By order of the Governor, state offices and agencies were closed on December 26, 1980. The motion for a new trial was not filed until the following Monday. The trial court denied Herren's motion to strike the motion for a new trial as untimely. Herren asserts that if the trial court was wrong in its ruling and the motion for a new trial was in fact untimely, then Reed's notice of appeal was also untimely and the appeal is due to be dismissed.

The gist of Herren's motion is that December 26, 1980, even though the circuit clerk's office was closed, was not a holiday within the meaning of Rule 6 of the Alabama Rules of Civil Procedure, and, hence, should be included in computing the time within which a motion for a new trial could be filed and served.

Rule 6 provides that in computing any time period under the rules of civil procedure, the last day of the period shall be included in the period unless the last day is "a Saturday, a Sunday, or a legal holiday, in which event the period runs until the end of the next day which is not a Saturday, a Sunday, or a legal holiday." Listed as "legal holidays" by Rule 6 are New Year's Day, Washington's Birthday, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, Christmas Day, and "any other day appointed as a holiday by the President or the Congress of the United States, or as prescribed in § 1-3-8, Code of Alabama, as amended." Code 1975, § 1-3-8, also enumerates days to be observed as holidays and also provides for some holidays to be designated by the governor.

Herren asserts that because December 26, 1980, was not declared a holiday by the President or Congress of the United States, it was not a holiday for purposes of Rule 6. We disagree.

The Committee Comments to Rule 6 state that the net effect of the rule is to include any holidays, whether state or federal, within the definition of "legal holiday." The Comments specifically state that § 1-3-8 "provides for holidays by gubernatorial declaration." While the Committee Comments do not carry the force of the rules themselves, they do provide insight and in this...

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