Wilma Corp. v. Fleming Foods of Alabama, Inc.

• Decision Date: 29 January 1993
• Citation: 613 So.2d 359
• Parties: WILMA CORPORATION, v. FLEMING FOODS OF ALABAMA, INC., et al. 1911257.
• Court: Alabama Supreme Court

Page 359

613 So.2d 359

WILMA CORPORATION, v. FLEMING FOODS OF ALABAMA, INC., et al.

1911257.

Supreme Court of Alabama.

Jan. 29, 1993.

Paul M. Harden and Anthony J. Bishop, Evergreen, for appellant.

Benjamen T. Rowe and David L. Kane, Mobile, for appellees.

HORNSBY, Chief Justice.

This case involves a dispute over whether the parties entered into a lease of shopping center property. Wilma Corporation, the proposed landlord, brought claims alleging breach of contract and fraud against the proposed tenants: Fleming Foods of Alabama, Inc., Fleming Companies, Inc., Dixieland Food Stores, Inc., and Aubrey Cochran (collectively referred to as "Fleming"). The trial court entered a summary judgment in favor of the proposed tenants on both claims. Wilma Corporation appeals, and we affirm.

Wilma Corporation undertook development of a shopping center in Evergreen, Alabama. Pursuant to its development plan, it began negotiations in 1986 with Dixieland, a wholly owned subsidiary of the Fleming companies, for placement of a Piggly Wiggly grocery store in the shopping center. Initially, Edwin M. McIntyre, Jr., the president of Wilma Corporation, contacted Aubrey Cochran, the director of retail development for Dixieland, regarding the proposed lease of space for a Piggly Wiggly store in Evergreen. The parties continued negotiations intermittently over the next three years.

The parties met on May 30, 1989, to discuss the terms of a proposed lease agreement. Wilma Corporation alleges that the purpose of the meeting was to finalize the lease agreement. Fleming, however, contends that the meeting was held for Cochran to obtain the information necessary to complete paperwork for the preparation of a lease agreement. McIntyre represented Wilma Corporation at this meeting, while Cochran represented Dixieland. John Milner, an architect employed by Wilma Corporation, was also present at the meeting. The meeting resulted in a document called "Build and Lease Agreement and Sublease Lease Information," which specified the terms of an anticipated lease.

Neither party treated this document as a final copy of the lease. Fleming contends that the document was a working draft from which Cochran was to draft a recommendation for lease to Fleming. Wilma Corporation alleges that the document was more binding, but it concedes that this document was not the final lease. Wilma Corporation asserts that Cochran told McIntyre that Fleming would complete and execute the lease, based on the information in the document, and that Wilma Corporation would receive a final copy of the lease three weeks after the meeting on May 30, 1989.

Wilma Corporation asserts that at the meeting on May 30, 1989, Cochran fraudulently misrepresented that the lease agreement was a "done deal" when Cochran signed the lease order, otherwise referred to as the "Build and Lease Agreement and Sublease Lease Information." Specifically, Wilma Corporation alleges that it relied on Cochran's statement, which was described by McIntyre in deposition:

"A. I specifically asked him, 'Mr. Cochran, would it be okay if I go ahead and tear [down] the other two buildings ... because of the time factor?' And he said, 'As far as I'm concerned, yes, sir, it's a done deal. When I signed this lease order, it automatically made it a done deal.'

"....

"A. ... And he said, 'As far as I'm concerned the deal is done. When I signed this lease order, that made it a done deal, and you will be getting your lease in three weeks.' "

Milner agrees that Cochran made this statement, although Cochran denies it.

Wilma Corporation alleges that, in reliance on Cochran's alleged misrepresentation, it demolished two buildings, one of which was worth approximately $150,000 and produced rental income of approximately $1,000 per month, and incurred other costs, in anticipation of constructing and leasing a building to Fleming for the grocery store. After Fleming notified Wilma Corporation that it did not plan to proceed with the lease agreement, Wilma Corporation sued Fleming, alleging breach of contract and fraud.

The trial court entered a summary judgment in favor of Fleming on both claims, holding that the contract claim was barred by the Statute of Frauds, Ala.Code 1975, § 8-9-2. With regard to the fraud claim, the trial court held that Wilma Corporation had presented no evidence of an intent by Fleming to deceive at the time of the alleged misrepresentation, on May 30, 1989. In addition, the trial court held that Wilma Corporation had presented no evidence that it justifiably relied on the alleged misrepresentation by Cochran.

On appeal, Wilma Corporation argues that the trial court erred in entering the summary judgment on the contract claim because, it argues, it produced a writing sufficient to satisfy the Statute of Frauds. Alternatively, Wilma Corporation argues that Fleming is equitably estopped from asserting the Statute of Frauds as an affirmative defense because, it argues, Fleming acted fraudulently. Wilma Corporation also challenges the summary judgment on the fraud claim. Wilma Corporation contends that it presented sufficient evidence of each element of the claim to survive a motion for summary judgment.

"In reviewing the disposition of a motion for summary judgment, we utilize the same standard as the trial court in determining whether the evidence before [it] made out a genuine issue of material fact" and whether the defendant was "entitled to a judgment as a matter of law." Bussey v. John Deere Co., 531 So.2d 860, 862 (Ala.1988) (citing Chiniche v. Smith, 374 So.2d 872 (Ala.1979)); Rule 56(c), A.R.Civ.P. The movant has the burden of "showing material facts, which, if uncontested, entitle the movant to judgment as a matter of law." Berner v. Caldwell, 543 So.2d 686, 688 (Ala.1989); Woodham v. Nationwide Life Ins. Co., 349 So.2d 1110, 1111 (Ala.1977). Once the movant has made this showing, the opposing party then has the burden of presenting evidence creating a genuine issue of material fact. Danford v. Arnold, 582 So.2d 545, 546 (Ala.1991); Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797-98 (Ala.1989).

The present action was filed after June 11, 1987; therefore, the nonmovant must establish the existence of a genuine issue of material fact by presenting substantial evidence. Ala.Code 1975, § 12-21-12; Bass v. SouthTrust Bank of Baldwin County, supra. "Substantial evidence" is "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989).

Our review is further subject to the caveat that this Court must review the record in a light most favorable to the nonmovant and must resolve all reasonable doubts against the movant. Hanners v. Balfour Guthrie, Inc., 564 So.2d 412, 413 (Ala.1990); Harrell v. Reynolds Metals Co., 495 So.2d 1381, 1383 (Ala.1986); Wilson v. Brown, 496 So.2d 756, 758 (Ala.1986).

I. CONTRACT CLAIM

A. Statute of Frauds

Wilma Corporation argues that Fleming breached a contract for the lease of real property for a term of 15 years. Fleming, however, contends that the purported lease is not valid because, it argues, the purported lease does not comply with the Statute of Frauds. The Statute of Frauds provides, in pertinent part:

"In the following cases, every agreement is void unless such agreement or some note or memorandum thereof expressing the consideration is in writing and subscribed by the party to be charged therewith or some other person by him thereunto lawfully authorized in writing:

"(1) Every agreement which, by its terms, is not to be performed within one year from the making thereof;

"....

"(5) Every contract for the sale of lands, tenements or hereditaments, or of any interest therein, except leases for a term not longer than one year, unless the purchase money, or a portion thereof is paid and the purchaser is put in possession of the land by the seller."

Ala.Code 1975, § 8-9-2.

Wilma Corporation concedes that the agreement--a contract for the sale of an interest in real property for a term greater than one year--falls within the Statute of Frauds. However, Wilma Corporation contends that it produced a writing sufficient to satisfy the Statute. The Statute of Frauds does not require a formal or complete contract; rather a note or memorandum containing the essential elements of the agreement, signed by the party to be charged, is sufficient. Bunch v. Garner, 208 Ala. 271, 272, 94 So. 114, 115 (1922).

As evidence of the parties' contract, Wilma Corporation presented the "Build and Lease Agreement and Sublease Lease Information," which Cochran signed, as Dixieland's store development representative, on May 30, 1989. This document includes the essential terms of the lease, including the lessor's name and address, lessee's name, location of the property, term of the lease, options, base rent, percentage rent, payment method, tax obligations, detailed agreements for interior and exterior requirements for the building, size of the parking lot, common area maintenance, liability insurance obligations, and additional space requirement guarantees for the supermarket. Although Wilma Corporation contends that this writing was sufficient to create an enforceable contract, neither party treated it as the final lease agreement.

Wilma Corporation contends that Cochran's signature on the "Build and Lease Agreement and Sublease Lease Information" is sufficient to bind Fleming. Fleming, however, argues that Cochran had no authority to enter into the alleged contract with Wilma Corporation. Further, Fleming argues that Cochran's authority to enter into a contract that is subject to the Statute of Frauds on behalf of Fleming must be in writing. See Hight v. Byars, 569 So.2d 387, 388 (Ala.1990). In Hight, this Court noted that it is a well-settled principle "that in...