Wheeler v. George, No. 1070484 (Ala. 7/17/2009)
| Decision Date | 17 July 2009 |
| Docket Number | No. 1070484.,No. 1070487.,No. 1070514.,1070484.,1070487.,1070514. |
| Parties | Helen Kathryn Wheeler et al. v. Randall L. George et al. Southdale, LLC v. Randall L. George et al. Todd Strange v. Helen Kathryn Wheeler et al. |
| Court | Alabama Supreme Court |
Appeals from Montgomery Circuit Court (CV-04-1434)
individually and as president of the MACOC; and David Echols, a former employee of the Alabama Development Office ("the ADO"), but they were dismissed by stipulation and are not appellees. In case no. 1070514, Strange cross-appeals from the trial court's order denying his motion for a summary judgment on the ground of State or State-agent immunity. In case no. 1070484 and case no. 1070487, we affirm in part, reverse in part, and remand; in case no. 1070514, we reverse and remand.
In June 2001, a representative of Hyundai, a Korean automobile manufacturer, contacted Echols, who at that time worked for the ADO, expressing Hyundai's interest in locating an automobile-assembly plant in the United States and requesting information regarding incentives and available locations in Alabama that could accommodate a large automobile-manufacturing facility. Hyundai was considering at least two sites in Alabama—Montgomery and Opelika—as well as sites in several other states, including Kentucky. Hyundai's identity was kept secret during the initial negotiations. In September 2001, officials from the City, the IDB, the County Commission, and the MACOC began making preparations to secure
options to purchase property in the Montgomery area in an effort to create an incentive package they hoped would persuade Hyundai to locate its plant near Montgomery. A significant parcel of land was an essential component of any incentive package. B.M. Ann, the Hyundai representative in charge of the site selection for the United States plant, testified during his deposition that a critical element of an incentive package offered to an automobile manufacturer was "free land" on which to locate its plant. Ahn also stated that Hyundai had no role in acquiring the land and that land acquisition for an incentive package was the responsibility of the city or the state putting the package together. Officials of the City, the County Commission, and the IDB signed a letter of intent stating that they, "in partnership with the State," would commit to provide an industrial site at no cost to Hyundai. Joseph, as chairman of the County Commission, was responsible for coordinating with City and County officials to develop the incentive package offered to Hyundai.
The City was to provide 62.5% of the funds to purchase the property; the County was to provide 37.5% of those funds. However, the option agreements on the parcels of property that would be included in the proposed Hyundai plant site were
acquired by the IDB. Thornton testified that the IDB's primary role in industrial projects is to "serve as the entity through which monies flow for the purchase of land for the ultimate use in industry." He further stated that the IDB is involved in such a process "to comply with state and federal tax laws for the tax breaks and other incentives to the industry."
Over the course of several months, the IDB secured options on six parcels of property for the industrial site. At that time, the IDB did not disclose Hyundai's identity to the landowners. Neither Wheeler nor Phillips resided in Alabama; they retained Jesse Williams, a lawyer with the Montgomery law firm of Rushton, Stakely, Johnston & Garrett, P.A., to represent their interests. In September 2001, Thornton, in his capacity as chairman of the IDB, executed option agreements on behalf of the IDB for four of the six parcels. The IDB agreed to purchase approximately 320 acres from Southdale; approximately 807 acres from Wheeler/Phillips; approximately 328 acres from George E. Russell and Thomas E. Russell, as coexecutors and cotrustees of the will and testamentary trust of Earnest W. Russell, and Myrtis Russell ("the Russells"); and approximately 40 acres from John C.
Parker and Eugenia M. Parker ("the Parkers"). These agreements provided for an option period of 120 days, and each stated:
(Emphasis added.) The parties refer to the provision in the option agreements that "the purchase price shall in no event be less than the price per acre paid to any other landowner included in the project planned for the Property" as a "most-favored-nation
clause." The purpose of the clause, as explained by Wheeler/Phillips and Southdale, was to ensure that all landowners conveying property to be used for the project would receive the same price so that no one parcel of land would be worth more than any other parcel. The mostfavored-nation clause allowed Alabama officials to obtain control of the needed land quickly, because landowners who executed option agreements early in the acquisition period were assured that they would not receive less than a landowner who might hold out until the deadline in order to seek a higher price. Officials in Kentucky were having difficulty securing the land needed for the proposed site in Kentucky because some landowners were negotiating for a higher sales price by refusing to execute option agreements before the deadline for submitting the incentive package. At the time the option agreements were being entered into in Alabama, lawsuits had already been filed in Kentucky concerning the land acquisition for the proposed site there.
In early 2002, Southdale, Wheeler/Phillips, the Russells, and the Parkers amended their option agreements to extend the option period to May 31, 2002. Each amended option agreement stated:
The amended options were executed by Southdale and Wheeler/Phillips on January 31, 2002; by the Parkers on February 1, 2002; and by the Russells on February 4, 2002.
On February 22 and March 8, 2002, respectively, Thornton executed two additional option agreements on behalf of the IDB to purchase approximately 54 acres from Price McLemore, Mary H. McLemore, John Mclnnis, Jr., Timothy N. Mclnnis, Charles R. McInnis, Williams S. Newell, and the Peoples Bank and Trust Company, as trustee for the Adaline Hooper Trust A and B ("the McLemore group"), and approximately 83 acres from Pelzer Homes, Inc. The terms of the option agreements, executed in early 2002, are identical to the terms of the option agreements executed in September 2001. The IDB later assigned
its rights under all the option agreements to the City and the County.
During the time in which the IDB was acquiring the options from the six above-referenced landowners, representatives of the MACOC approached Joy Shelton, a neighboring...
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