Super Valu Stores, Inc. v. Peterson

CourtSupreme Court of Alabama
Writing for the CourtMADDOX; TORBERT; HOUSTON; HOUSTON
Citation506 So.2d 317
Decision Date27 March 1987
PartiesSUPER VALU STORES, INC. v. Thomas J. PETERSON. 85-484.

Page 317

506 So.2d 317
SUPER VALU STORES, INC.
v.
Thomas J. PETERSON.
85-484.
Supreme Court of Alabama.
March 27, 1987.

Page 319

James A. Harris, Jr., Thomas H. Brown, Charles R. Driggars, and Kay K. Houser, of Sirote, Permutt, Friend, Friedman, Held & Apolinsky, Birmingham, and Patrick W. Richardson and Schuyler H. Richardson III, of Bell, Richardson, Herrington, Sparkman & Shepard, Huntsville, and James C.

Page 320

Stivender, of Inzer, Suttle, Swann & Stivender, Gadsden, for appellant.

Andrew W. Bolt II, W. Kirk Davenport, and Paula Ivey Cobia, of Bolt, Isom, Jackson & Bailey, Anniston, and Gregory S. Cusimano, Larry Keener, and Michael L. Roberts, of Floyd, Keener & Cusimano, Gadsden, and Fournier J. Gale III, Kirby Sevier, Lee E. Bains, Jr., and Maibeth J. Porter, of Maynard, Cooper, Frierson & Gale, Birmingham, for appellee.

MADDOX, Justice.

Hardin and Co., Warehouse Markets, Inc., Mary-Beth, Inc., Mary Hardin, Mary Lee Hardin, and Nettie Elizabeth Hardin (all these parties shall be referred to as "Hardin") commenced this action in March 1984 by filing a complaint against Super Valu Stores, Inc. ("Super Valu" or "Appellant") and Peterson ("cross-claimant" or "appellee"). Hardin claimed that Peterson, acting on behalf of Super Valu, had promised it the right to operate a certain type of grocery store (known as a "County Market") to be built at a particular location in Oxford, Alabama, and that Super Valu and Peterson had acted to deprive Hardin of this right. Hardin sought damages and injunctive relief to prevent the store from being constructed and from being operated by anyone else. The plaintiffs' claim in that lawsuit was settled and both Super Valu and Peterson were fully released from all potential liability to Hardin.

In that action Peterson filed a cross-claim against Super Valu in November 1984. That cross-claim arose out of an alleged willful failure by Super Valu to construct and lease to Peterson a discount grocery store, known as the Oxford County Market. Briefly stated, Peterson's substantive claims at trial were twofold: (1) that Super Valu's deliberate decision not to build this store as previously agreed constituted a material breach of an express contract, destroying Peterson's career plans and causing him to lose millions of dollars, and (2) that certain misrepresentations and nondisclosures by Super Valu resulted in enormous damages to him. On August 7, 1985, the jury returned a verdict against Super Valu and in favor of Peterson in the amount of $5,000,000 and a judgment was entered on the same date.

The facts pertinent to this action follow: Super Valu purchased a parcel of property in Oxford, Alabama, in 1981, and eventually made plans for its development as a "County Market." The County Market concept was a new one; the first County Market opened in 1981. The basic concept of the County Market is that it must be the lowest priced store in the market and operate on a high volume, low profit structure; thus, it must draw customers from a larger market area than a traditional supermarket. Since Super Valu was a wholesaler, it planned to have an independent retailer operate the County Market planned for Oxford. Peterson (who at this time was president of the Anniston Division of Super Valu) presented several potential operators, including Hardin, to Super Valu for consideration. Hardin was initially rejected by Super Valu as a retailer for the proposed Oxford County Market. Subsequently, Hardin was approved, conditioned upon acceptable financing being arranged, without credit assistance from Super Valu. Hardin thereafter failed to secure the required financing.

At least three other prospective retailers other than Peterson considered operating the Oxford County Market; however, none of these men decided to undertake the project. At this point (May 1983), Peterson decided to become a formal applicant for the retailer's position at the proposed County Market. In January 1984, Peterson was approved as the retailer of the proposed Oxford County Market. This approval required Peterson to retire from his job at Super Valu, because Super Valu policy would not allow an employee to own an interest in a retail grocery store.

In January 1984, a representative of Super Valu told Hardin that Peterson, not Hardin, would be the retailer of the proposed store. On February 14, 1984, Peterson received a letter from Hardin's attorney threatening suit because Hardin was not going to be the operator of the proposed store. In the meantime, progress

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continued for the development of the store with Peterson as the retailer. Peterson retired from Super Valu on February 29, 1984. In March 1984, Super Valu's attorney spoke to Peterson and asked him to hold off on going forward with the store until the Hardin situation could be resolved. Peterson agreed to do so. On April 3, 1984, Peterson was served with a complaint filed by Hardin against Super Valu and Peterson.

Shortly after the filing of the Hardin lawsuit, Peterson, through his attorney, made demands upon Super Valu to continue with the building of the proposed County Market. He later withdrew the demands that the development of the store proceed. On November 19, 1984, Peterson filed a cross-claim against Super Valu, alleging that Super Valu had entered into a binding contract with him whereby he would become the retailer of the proposed County Market in Oxford.

Super Valu raises twelve issues on appeal.

I

The first issue raised is whether the trial court erred to reversal in excluding from evidence all communications between the parties after April 3, 1984, the date Peterson was served with the Hardin complaint.

The trial court ruled that all communications between Peterson and Super Valu after April 3, 1984, were inadmissible because the court considered them to be offers of compromise of the preceding litigation against Super Valu and Peterson. Super Valu argues that this ruling deprived it of the opportunity to prove to the jury that: (a) Peterson and his attorneys agreed to the delay in proceeding to build the store until the Hardin claim for injunctive relief, and possibly specific performance, could be resolved; (b) Super Valu, on several occasions, after April 3, 1984, offered to perform its obligations under the contract; and (c) Peterson refused to go forward with the obligations under the contract. Super Valu contends that two letters that were excluded were clearly not offers of compromise; rather, that the letters confirmed an alleged modification of the alleged contract. Super Valu also argues that many of the communications excluded from evidence by the trial court's ruling were offers of performance, not offers of compromise, and should not have been excluded.

The Alabama law regarding the admissibility of settlement communications between parties is well established. The general rule is that offers of compromise by one party to another in a civil action, whether before or after the litigation is begun, is inadmissible. Glaze v. Glaze, 477 So.2d 435 (Ala.Civ.App.1985). Alabama courts also recognize that conversations in connection with settlement negotiations are inadmissible. Chandler v. Owens, 235 Ala. 356, 179 So. 256 (1938). Negotiations looking to a compromise of controversies are privileged and inadmissible. See, Ford v. Bradford, 212 Ala. 515, 103 So. 549 (1925). Likewise, offers to perform that are conditional amount to mere efforts to settle a pending claim and are thus inadmissible. Yeager v. Hurt, 433 So.2d 1176 (Ala.1983).

After numerous telephone conversations with Super Valu representatives, Peterson's attorney, A.W. Bolt, wrote a letter to Patrick Cashin, in-house counsel for Super Valu, on April 13, 1984. This letter stated, in pertinent part:

"Tom has thought long and hard about the alternatives that are available. Since he has done nothing wrong and he retired in order to remain in this area and own and operate the County Market store in Oxford, he is not going to allow someone to intimidate him out of what is rightfully his. Tom feels that he did everything he could to assist Mary Hardin in her business and to obtain the Oxford store for her; she simply did not cooperate and was not able to meet the financial and management criteria of the home office.

"Tom wants the Oxford store, and he wants it now since further delay permits the competition to get into the market and further undermines his ability to get the store profitable quickly. Furthermore, Tom requests your written agreement

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to indemnify and hold him harmless for the allegations of the complaint, and to pay the expenses of his defense."

The three demands raised in this initial letter--(a) completion of the Oxford store, (b) an agreement to indemnify, and (c) payment of expenses of defense--would continue to permeate all future negotiations and discussions between the parties. The trial court refused to permit this letter to be introduced into evidence.

In the midst of trial, Super Valu also sought to introduce the testimony of Peterson, Cashin, Gene Hoffman (Peterson's immediate supervisor), and Mike Wright regarding certain conversations occurring after April 3, 1984. Super Valu also sought to introduce selected letters between the parties written after that date. The trial court heard argument by counsel, examined the documents in camera and heard testimony, outside the presence of the jury, and reviewed a number of letters during an overnight recess. After reviewing the evidence, the court granted Peterson's motion in limine and refused to admit evidence offered by Super Valu of selected communications between the parties or their attorneys after the service of the Hardin complaint. The court concluded that all proffered communications were in the nature of settlement negotiations.

Super Valu heavily concentrates its argument on the two letters dated April 13, 1984, 1 and May 18, 1984, 2 from Peterson's...

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80 practice notes
  • Life Ins. Co. of Georgia v. Smith
    • United States
    • Supreme Court of Alabama
    • July 17, 1998
    ...therefore, that the excess over nominal damages could properly be upheld as punitive damages. See Super Valu Stores, Inc. v. Peterson, 506 So.2d 317 (Ala.1987) (upholding a general verdict for an amount obviously in excess of nominal damages where the jury heard evidence that the plaintiff ......
  • Beverly Hills Concepts, Inc. v. Schatz and Schatz, Ribicoff and Kotkin, No. 15730
    • United States
    • Supreme Court of Connecticut
    • September 15, 1998
    ...the [fact finder] could, with 'reasonable certainty' calculate the amount of lost profits." Super Valu Stores, Inc. v. Peterson, 506 So.2d 317, 330 (Ala.1987) (upholding $5 million verdict for breach of contract to open grocery store where plaintiff projected profits of $20 million ove......
  • Ala. River Grp., Inc. v. Conecuh Timber, Inc., 1150040
    • United States
    • Supreme Court of Alabama
    • September 29, 2017
    ...settle a pending claim and are thus inadmissible. Yeager v. Hurt, 433 So.2d 1176 (Ala. 1983)." Super Valu Stores, Inc. v. Peterson, 506 So.2d 317, 321 (Ala. 1987) (emphasis added). In the instant case, the wood dealers' letter plainly moves from seeking to memorialize business agreemen......
  • Birmingham News Co. v. Horn
    • United States
    • Supreme Court of Alabama
    • June 11, 2004
    ...an unestablished business may be recovered if such damages are proved with `reasonable certainty.' Super Valu Stores, Inc. v. Peterson, 506 So.2d 317 (Ala.1987); Morgan v. South Central Bell Telephone Co., 466 So.2d 107 (Ala.1985)." Kirkland & Co. of Anniston, P.C. v. A & M Foo......
  • Request a trial to view additional results
80 cases
  • Life Ins. Co. of Georgia v. Smith
    • United States
    • Supreme Court of Alabama
    • July 17, 1998
    ...therefore, that the excess over nominal damages could properly be upheld as punitive damages. See Super Valu Stores, Inc. v. Peterson, 506 So.2d 317 (Ala.1987) (upholding a general verdict for an amount obviously in excess of nominal damages where the jury heard evidence that the plaintiff ......
  • Beverly Hills Concepts, Inc. v. Schatz and Schatz, Ribicoff and Kotkin, No. 15730
    • United States
    • Supreme Court of Connecticut
    • September 15, 1998
    ...the [fact finder] could, with 'reasonable certainty' calculate the amount of lost profits." Super Valu Stores, Inc. v. Peterson, 506 So.2d 317, 330 (Ala.1987) (upholding $5 million verdict for breach of contract to open grocery store where plaintiff projected profits of $20 million ove......
  • Ala. River Grp., Inc. v. Conecuh Timber, Inc., 1150040
    • United States
    • Supreme Court of Alabama
    • September 29, 2017
    ...settle a pending claim and are thus inadmissible. Yeager v. Hurt, 433 So.2d 1176 (Ala. 1983)." Super Valu Stores, Inc. v. Peterson, 506 So.2d 317, 321 (Ala. 1987) (emphasis added). In the instant case, the wood dealers' letter plainly moves from seeking to memorialize business agreemen......
  • Birmingham News Co. v. Horn
    • United States
    • Supreme Court of Alabama
    • June 11, 2004
    ...an unestablished business may be recovered if such damages are proved with `reasonable certainty.' Super Valu Stores, Inc. v. Peterson, 506 So.2d 317 (Ala.1987); Morgan v. South Central Bell Telephone Co., 466 So.2d 107 (Ala.1985)." Kirkland & Co. of Anniston, P.C. v. A & M Foo......
  • Request a trial to view additional results

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