Smith v. Style Advertising, Inc.

• Decision Date: 03 May 1985
• Parties: Gary E. SMITH and Valley View Associates, Ltd. v. STYLE ADVERTISING, INC., a corporation. 83-769.
• Court: Alabama Supreme Court

Page 1194

470 So.2d 1194

Gary E. SMITH and Valley View Associates, Ltd. v. STYLE ADVERTISING, INC., a corporation.

83-769.

Supreme Court of Alabama.

May 3, 1985.

Ronald L. Stichweh and David J. Vann of Carlton, Vann & Stichweh, Birmingham, for appellants.

Michael L. Edwards of Berkowitz, Lefkovits, Isom, Edwards & Kushner, Birmingham, for appellee.

ADAMS, Justice.

Gary Smith and Valley View Associates, Ltd., a limited partnership of which Smith is a general partner, appeal a judgment holding them liable to Style Advertising, Inc., for costs incurred in advertising the sale of condominiums. We affirm the judgment of the trial court.

The issue in this case is whether Gary Smith and Valley View Associates, Ltd., are liable for the advertising services performed for the sale of condominiums initially owned by the partnership, in addition to a corporation incorporated by Gary Smith which later owned the condominiums.

The case was tried ore tenus, and the trial court found the facts to be as follows:

Valley View Associates, Ltd., is a limited partnership formed in November 1977 with appellant Smith serving as a general partner. The limited partnership purchased the Valley View Apartments in Birmingham on the date it was formed.

At some point in early 1980, Valley View Associates, Ltd., made the decision to convert some of the units of the Valley View Apartments into condominiums for sale to the public. A meeting was held between Albert E. Oelschlaeger, the president of Style Advertising, and Robert J. McClure, an employee of Valley View Associates, in the office of Centennial Realty Company, a sole proprietorship owned by Gary Smith. The purpose of the meeting was the preparation of advertising and marketing plans for the sale of the condominiums.

At this meeting, McClure told Oelschlaeger that Smith would have to approve any expenditures for advertising. Later, McClure told Oelschlaeger that Smith would not agree to a long term advertising commitment, but would consider monthly proposals submitted to him by Style Advertising. Style proceeded with the advertising campaign on this monthly basis.

The billing statements sent by Style were addressed to "Valley View Condominiums" and delivered to McClure. The first two bills were paid by checks drawn on the account of Centennial Realty Company, the aforementioned business owned by Gary Smith. Style received no further payments in 1980.

Centennial Housing, Inc., was incorporated in October 1980. Gary Smith was one of the incorporators. In November 1980, Valley View Associates conveyed a portion of the Valley View Apartments to Centennial Housing, Inc., so the corporation could sell the apartments as condominiums. Prior to this incorporation, no units had been sold, but purchase agreements had been negotiated with members of the public, and signed in the name of Centennial Realty Company as seller. After the incorporation, the purchase agreements were assigned to Centennial Housing, Inc., which closed the sales and which was listed as seller on the sales contracts. By the time of the incorporation of Centennial Housing, Inc., and the conveyance of the apartments to it, however, Style Advertising had already completed most of its services in regard to the sale of the condominiums.

In early 1981, Oelschlaeger made attempts to collect the balance owed by Gary Smith for the advertising services performed. In order to keep Style from filing a lawsuit, on March 6, 1981, Smith, as president of Centennial Housing, Inc., offered to pay an immediate finance charge to Style, and to pay the principal due by April 30, 1981. Style agreed to this arrangement. Smith made no further payments, however, and Style filed suit in July 1981.

After an ore tenus hearing, the trial court concluded that Valley View Associates, Ltd., and Gary Smith, as general partner, were liable to Style Advertising for the amount due. The court found dispositive the fact that Valley View Associates, Ltd., was the owner of the apartments during most of the time that Style was performing advertising services. Also important was the fact that the purchase agreements which were executed while Valley View Associates, Ltd., owned the apartments, listed Gary Smith's business, Centennial Realty Company, as the seller.

We now discuss why the trial court was correct in its conclusion that Valley View Associates, Ltd., and Gary Smith as its general partner, were liable along with Centennial Housing, Inc., for the costs of advertising done by Style.

Appellants recognize that where the trial court hears evidence ore tenus, its judgment is presumed correct unless the court took an erroneous view of the law as applied to the facts, Waters v. Merritt, 277 Ala. 346, 170 So.2d 492 (1964), or unless the facts found are palpably wrong or manifestly unjust. Sterling Oil of Oklahoma v. Pack, 291 Ala. 727, 287 So.2d 847 (1973). Appellants argue that the trial court...