Winkleblack v. Murphy

• Court: Alabama Supreme Court
• Writing for the Court: STUART, Justice.
• Citation: Winkleblack v. Murphy, 811 So. 2d 521 (Ala. 2001)
• Decision Date: 31 August 2001
• Parties: Sue WINKLEBLACK and J. Douglas Winkleblack, as personal representatives of the Estate of Jack D. Winkleblack, deceased, and Links of the Southeast, Inc. v. Michael P. MURPHY, Sr., as personal representative of the estate of James D. Murphy, Jr., deceased, and Country Club of Alabama, Inc.

811 So.2d 521

Sue WINKLEBLACK and J. Douglas Winkleblack, as personal representatives of the Estate of Jack D. Winkleblack, deceased, and Links of the Southeast, Inc. v. Michael P. MURPHY, Sr., as personal representative of the estate of James D. Murphy, Jr., deceased, and Country Club of Alabama, Inc.

1000388.

Supreme Court of Alabama.

August 31, 2001.

James L. Martin, Eufaula, for appellants.

Walter B. Calton of Calton & Rutland, L.L.C., Eufaula, for appellees.

STUART, Justice.

The plaintiffs, Sue Winkleblack and J. Douglas Winkleblack, as personal representatives of the estate of Jack D. Winkleblack, deceased, and Links of the Southeast, Inc., appeal from a judgment entered by the Barbour Circuit Court in favor of the defendants, Michael P. Murphy, Sr., as personal representative of the estate of James D. Murphy, Jr., deceased, and Country Club of Alabama, Inc. The principal legal issue presented on appeal is whether the trial court correctly construed the provisions of several interrelated contractual agreements involving the parties and properly determined their relationship. We affirm the judgment of the trial court.

Facts and Procedural History

James D. Murphy, Jr., incorporated Country Club of Alabama, Inc. ("CCA"), to develop a golf course and residential community in Barbour County. On April 9, 1991, Murphy entered into an agreement entitled "Contract and Employment Agreement" (the "Contract") with Pepperland Property, Inc. ("Pepperland"), a Georgia corporation, for Pepperland to market and sell the lots at CCA's development. Under the terms of the Contract, Pepperland's initial compensation was to come only from the fees paid for options to purchase the lots, but after sales were sufficient to pay off the $380,000 balance of a note owed to Eufaula Bank and Trust Company ("EB & T"), Pepperland was to begin receiving half of the "net proceeds" from sales of the lots. According to the Contract, "net proceeds" meant the sales price less closing costs.

On December 11, 1991, Pepperland; its sole shareholder; the plaintiffs; and the defendants entered into several agreements. Pepperland, its sole shareholder, and the plaintiffs executed an instrument entitled "Assignment of Interest in Real Estate Owned by CCA, Inc., an Alabama Corporation" (hereinafter the "Assignment"). In the Assignment, Pepperland and its shareholder assigned to Links of the Southeast, Inc. (hereinafter "Links") and its sole shareholder, Jack D. Winkleblack, "all [their] rights, privileges, immunities, interest, and responsibilities in the remaining unsold lots and acreage owned by CCA." Neither Murphy nor CCA was a party to this Assignment.

Exhibit A to the Assignment was entitled "Statement and Certification of Unsold Lots and Acreage and of Minimum Prices for Remaining Lots and Acreage" (hereinafter the "Certification"). In this document, Pepperland and its sole shareholder, together with Murphy and CCA, acknowledged the following: that title to certain specified lots and six acres of multi-family property was vested in CCA, Inc., and was subject to a mortgage held by EB & T; that those properties were unsold; and that minimum prices for the unsold lots and the acreage had been established.

Exhibit B to the Assignment was entitled "Agreement and Acknowledgment of Assignment" (hereinafter the "Agreement"). In the Agreement, Murphy and CCA approved the Assignment by Pepperland to Winkleblack and Links and "acknowledge[d] and agree[d]" that Winkleblack and Links "has an undivided one-half (½) interest in and to the proceeds of all sales of the remaining unsold lots and acreage in the Country Club of Alabama Subdivision as shown on Exhibit A." The Agreement further provided:

"[I]n consideration of not conveying title to purchaser for an undivided one-half (½) interest in and to the remaining unsold lots and acreage in the Country Club of Alabama Subdivision that purchaser shall receive one-half (½) of the proceeds of the sales prices of each of the remaining lots and acres in the Country Club of Alabama Subdivision, free and clear of all liens and encumbrances and on the date of the closing of each sale."

The parties to the Agreement also agreed that the minimum prices shown in the Certification (Exhibit A) would not be increased or decreased except by mutual written consent.

Despite the fact that the Agreement designated Murphy and CCA as "owners," and Winkleblack and Links as "purchasers," the Agreement contained no words of conveyance, i.e., no real estate was conveyed as a result of the Agreement. The Assignment and its Exhibits were prepared by the attorney representing Winkleblack and Links.

In May 1996, Murphy sold Lots 16 and 72 in the CCA subdivision, and he issued checks to Winkleblack in the amounts of $3,125 and $4,125. Winkleblack later died. Winkleblack had not negotiated the two checks, and they were found among his possessions after his death.

On August 13, 1999, Sue Winkleblack and J. Douglas Winkleblack, as personal representatives of the estate of Jack D. Winkleblack, deceased; and Links (hereinafter the three are collectively referred to as "Winkleblack") filed this action in the Barbour Circuit Court against James D. Murphy, Jr., and Country Club of Alabama, Inc., of which he was the sole owner (hereinafter the two are collectively referred to as "Murphy"). The plaintiffs alleged that Murphy had breached his contract with Winkleblack, and they demanded an accounting. The plaintiffs also alleged that they were entitled to one-half of the proceeds from the sale of the lots specified in the Certification. Murphy answered that the plaintiffs were entitled to one-half of the proceeds from the sale of the specified lots only if the conditions of the Contract with Pepperland were fulfilled. James D. Murphy, Jr., died before the trial of this action; Michael P. Murphy, Sr., as his personal representative, was substituted as a defendant.

The action was tried without a jury, and the trial court heard evidence presented ore tenus. The trial court initially held in favor of Winkleblack, finding that he was entitled to one-half of the proceeds from the sale of the lots that had been sold at the CCA subdivision and ordered an accounting; the trial court also held that Winkleblack was entitled to one-half of the proceeds from any future sales of any of the specified lots.

Murphy then filed a motion to alter, amend, or vacate the judgment, asserting that the trial court's judgment should be vacated, because, Murphy contended, the court had not had before it sufficient evidence to support a finding that Winkleblack had discharged his duties and obligations, as assignee, to market and sell the lots and to perform other duties required in order to earn his commission on the sale of the lots. Murphy also asserted that the language contained in the Assignment, the Certification, and the Agreement was ambiguous in that, among other things, he contended, it purported to assign the proceeds of the sale of the lots to Winkleblack without assigning any of the corresponding obligations and duties provided for in the original Contract with Pepperland. Further, Murphy asserted that he could not comply with the trial court's judgment because, he contended, it failed to specify the duties and obligations owed by the plaintiffs to the defendants under the Assignment and the other documents and failed to define the term "sales price" or the term "minimum prices," as they were used in the Assignment and other documents.

After conducting a hearing on these issues, the trial court entered an amended judgment. In its amended judgment, the trial court concluded that, when read together, the language in the Assignment, the Certification, and the Agreement, was ambiguous. The trial court concluded that Pepperland could assign to Winkleblack only those interests it possessed at the time of the Assignment. Because Pepperland possessed no real property rights in the CCA development, Pepperland, the court held, could not convey any real property rights in that development to Winkleblack. Further, the trial court concluded that, along with its rights and interests, Pepperland had also assigned to Winkleblack its contractual responsibilities and obligations regarding the marketing and sale of the lots and acreage located in CCA. Thus, in its amended judgment, the trial court concluded:

"In the original employment contract, Pepperland agreed to market and sell lots at CCA; to secure purchase options from prospective purchasers on the form provided; and, to collect the option fees. Pepperland was entitled to keep the option fees until sales were sufficient to retire the EB & T loan. Thereafter, Pepperland was entitled to one-half the net proceeds from the lots it sold.

"Plaintiffs are entitled to no less and no more under the Agreement. If and when Plaintiffs market and sell lots, they will be entitled to the compensation specified under the Assignment. However, they are entitled to no compensation unless they do discharge their obligations to sell and market lots."

(C. 156.) The trial court's amended judgment further stated:

"IT IS, THEREFORE, ORDERED, ADJUDGED and DECREED that:

"1. In the event plaintiffs fulfill their responsibilities under paragraphs 1 and 2 of the assumed contract, they will be entitled to the compensation provided for in paragraphs 3 and 4 of the contract; and, after sufficient proceeds have been collected to retire the EB & T loan, plaintiffs will be entitled to receive as `additional salary' one-half of the net proceeds from the sale of the lots which they market and sell. (¶ 5 and [¶] 7 of the Contract.)

"2. Defendants may sell lots without the assistance of Plaintiffs. In such event, defendants will not incur any obligation to plaintiffs for fees or salary, but the proceeds of such sales will apply to reduce the EB & T loan balance.

"3. The parties have thirty days to make an accounting showing lots sold and

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