Lafayette Land Acquisitions II, LLC v. Steven L. Walls ( 2023 )

Rel: April 21, 2023
Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other
errors, in order that corrections may be made before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2022-2023
_________________________
SC-2022-0765
_________________________
Lafayette Land Acquisitions II, LLC
v.
Steven L. Walls
Appeal from Baldwin Circuit Court
(CV-21-900417)
MITCHELL, Justice.
Whenever possible, we interpret a written contract based on the
language contained within the four corners of the document. Here, a
SC-2022-0765
purchase agreement provided that the parties were obligated to close a
real-estate sale unless the buyer -- Lafayette Land Acquisitions II, LLC
("Lafayette Land") -- rejected the deal in writing before the end of the
due-diligence period. Although the parties dispute when that period
began, and how long it lasted, it is undisputed that Lafayette Land never
rejected the deal. Therefore, the parties are obligated to close. Because
the Baldwin Circuit Court held otherwise, we reverse and remand.
Facts and Procedural History
Lafayette Land offered to buy Steven L. Walls's property in Orange
Beach. Walls accepted the offer, and the parties entered into a purchase
agreement that became effective on February 26, 2021. The purchase
agreement provided, in part, that "Seller will provide and Buyer will
accept an existing survey or plat." It set a closing date of April 26, 2021,
and stated that "[t]ime is of the essence."
Two addenda -- Addendum #1 and Addendum #2 -- followed the
purchase agreement. Only Robert Isakson, Sr., the owner and manager
of Lafayette Land, accepted Addendum #1. Addendum #1 contained
Walls's signature at the bottom, but he did not check the "accepted" box
associated with the signature line. Instead, he checked the "countered"
2
SC-2022-0765
box and indicated that a counter-addendum was attached as "Addendum
#2."
Addendum #2, which both parties signed and accepted, contains
two clauses that lie at the heart of this dispute. The first clause defines
the length of the due-diligence period, stating: "Buyer shall have a period
of sixty (60) days subsequent [to] the date in which Buyer is in receipt of
Seller's Due Diligence materials ('Due Diligence Period') to determine
whether or not to purchase the 'Property.' " The second clause contains
key language on the role of silence during the due-diligence period:
"If Buyer does not give written notice to Seller of its election
to not purchase the property prior to the expiration of the Due
Diligence Period, then it is agreed that the Buyer shall be
deemed to have approved the Property and the parties shall
proceed to Closing subject to the provisions set forth herein."
The second clause further states that "Seller agrees to provide one 30-
day extension to the Due Diligence Period to extend the closing for the
deposit of the sum of $5,000 paid directly to Seller."
In the months that followed, the parties engaged in an extended
back-and-forth about whether each party was meeting the requirements
of the purchase agreement. First, they disagreed about whether Walls
had provided documents that Lafayette Land said that it had requested.
3
SC-2022-0765
Next, the parties disagreed about when the due-diligence period had
begun and ended. Finally, after Walls received multiple additional offers
for the property, including one that was $100,000 more than what
Lafayette Land had agreed to pay, Walls asked Lafayette Land to sign
an agreement releasing both parties from the deal. Lafayette Land
refused and proposed an amendment that would maintain the closing
date set out in the purchase agreement. Walls did not agree and insisted
that Lafayette Land sign the release. Sue Ginter, Walls's real-estate
agent, summarized the selling side's unwillingness to close the deal when
she told Isakson's paralegal that "[w]e all need to move on."
But Lafayette Land wanted to close. In an effort to protect its
rights, Lafayette Land filed a complaint in the Baldwin Circuit Court
several days before the closing date. In the complaint, it asked for a
judgment declaring that the purchase agreement was "valid and
binding." Lafayette Land also filed a notice of lis pendens in the Baldwin
Probate Court referencing the declaratory-judgment action and noting
that it was seeking a court order requiring Walls to convey the property.
Walls represented himself in the declaratory-judgment action and filed
an answer in which he asked the circuit court to declare the purchase
4
SC-2022-0765
agreement void. After conducting a bench trial, the circuit court entered
a declaratory judgment in favor of Lafayette Land. Walls then obtained
counsel and filed a motion to alter, amend, or vacate the judgment, which
the circuit court granted.
The circuit court conducted a second bench trial, at which it heard
testimony from Isakson, Walls, and Ginter. During the trial, Isakson
testified that he never rejected the deal in writing. Neither Walls nor
Ginter refuted that testimony. At the conclusion of the trial, the circuit
court issued a final judgment in favor of Walls. In doing so, it made three
factual findings. First, it determined that "the Purchase Agreement that
was entered into between the parties ... expired … and the Court finds
that [Lafayette Land] failed to exercise it's [sic] option to extend the due
diligence period of 30 days." Second, it reasoned that "no due diligence
materials were specified in the contract, therefore no due diligence
materials were due from [Walls] to [Lafayette Land]." Finally, it found
that Lafayette Land had received either a survey or a plat from Walls as
provided in the purchase agreement. It concluded by stating that "[t]here
are no remaining duties owed [Lafayette Land] or [Walls] under the
5
SC-2022-0765
Purchase Agreement." After the circuit court issued its judgment,
Lafayette Land appealed.
Standard of Review
When a trial court hears ore tenus testimony, " 'its findings on
disputed facts are presumed correct and its judgment based on those
findings will not be reversed unless the judgment is palpably erroneous
or manifestly unjust.' " Fadalla v. Fadalla, 929 So. 2d 429, 433 (Ala. 2005)
(citation omitted). But " 'the ore tenus rule does not extend to cloak with
a presumption of correctness a trial judge's conclusions of law or the
incorrect application of law to the facts.' " Id. (citation omitted). Further,
"[i]f a contract can be interpreted without going beyond the four corners
of the document, the trial court's resolution of the question of law is
accorded no presumption of correctness, and this Court's review is de
novo." Exxon Mobil Corp. v. Alabama Dep't of Conservation & Nat. Res.,
986 So. 2d 1093, 1101 (Ala. 2007).
Analysis
Lafayette Land makes one dispositive argument on appeal -- that
the circuit court erred by failing to give effect to the provision in
Addendum #2 that directed the parties to close if Lafayette Land did not
6
SC-2022-0765
provide a written rejection before the due-diligence period ended. We
agree with that argument.
When the language of a written agreement is unambiguous, we
confine our review to the four corners of the document. See Kershaw v.
Kershaw, 848 So. 2d 942, 955 (Ala. 2022). Language is unambiguous
when it leads to only one reasonable interpretation. Ex parte Warren
Averett Cos., [Ms. 1210010, June 17, 2022] __ So. 3d __ (Ala. 2022). And
in that instance, we must accept that language for what it says and may
not "twist the plain meaning of the terms in a contract to create an
ambiguity under the guise of interpretation." Southland Quality Homes,
Inc. v. Williams, 781 So. 2d 949, 953 (Ala. 2000).
Here, the relevant language in Addendum #2 is unambiguous. It
states: "If Buyer does not give written notice to Seller of its election to not
purchase the property prior to the expiration of the Due Diligence Period,
then it is agreed that the Buyer shall be deemed to have approved the
Property ...." If no written rejection occurs, "the parties shall proceed to
Closing subject to the provisions set forth herein." We agree with the
circuit court's determination that the due-diligence period has ended.
Thus, all that had to be determined was whether Lafayette Land had
7
SC-2022-0765
provided written notice to Walls before the due-diligence period ended
that it elected not to purchase the property.
A review of the record shows that Lafayette Land never provided
any written rejection to Walls. The communications before Lafayette
Land filed suit reflect a continuous effort by Isakson to obtain more
information about the property to determine whether to continue with
the transaction; but there is no indication that Isakson, or any
representative of Lafayette Land, ever rejected the deal. On the contrary,
Isakson gave unrebutted testimony during the trial that he never
rejected the property as unsatisfactory. Walls neither cross-examined
Isakson on this point nor presented any evidence of his own indicating
that Isakson had rejected the deal. And, once Walls demonstrated an
unwillingness to fulfill his obligations under the purchase agreement,
Lafayette Land commenced this action, which further demonstrates its
good-faith intent to close. Because we agree with the circuit court's
finding that the due-diligence period ended, the parties were obligated to
close the deal.
Walls makes two arguments in an effort to avoid closing. First, he
points to a provision in the purchase agreement that addresses his
8
SC-2022-0765
options in the event Lafayette Land defaulted on the agreement. One of
those options gave Walls the "right to terminate this Agreement." But
Walls does not point to any facts or offer any sort of argument
demonstrating that Lafayette Land ever defaulted on the purchase
agreement. So his first argument fails.
Second, Walls contends that Lafayette Land waived the dispositive
issue outlined above by failing to cite proper authority. But Lafayette
Land cited our cases stating the longstanding rule that we give effect to
the plain language of written agreements. See, e.g., Shoney's, LLC v.
MAC East, LLC, 27 So. 3d 1216, 1223 (Ala. 2009) ("[W]e maintain our
long-held position that a contract, under Alabama law, should be
construed as written."); Reeves Cedarhurst Dev. Corp. v. First AmFed
Corp., 607 So. 2d 184, 186 (Ala. 1992) ("In interpreting a contract, the
' "words of the agreement will be given their ordinary meaning." ' "
(citations omitted)). And it pointed us to the operative language of
Addendum #2, which states that the parties "shall proceed to Closing."
Accordingly, Walls's second argument fails as well.
9
SC-2022-0765
Conclusion
Because Lafayette Land never rejected the deal to purchase the
property in writing and was willing to close on the date specified in the
purchase agreement, the parties are obligated to close. The circuit court
erred when it concluded that the purchase agreement had "expired" and
that, as a result, neither party owed a duty to the other. We therefore
reverse and remand.
REVERSED AND REMANDED.
Parker, C.J., and Mendheim, Stewart, and Cook, JJ., concur.
Shaw, J., concurs in the result, with opinion, which Wise and
Bryan, JJ., join.
Sellers, J., concurs in the result, without opinion.
10
SC-2022-0765
SHAW, Justice (concurring in the result).
I concur in the result. The "due-diligence period" referenced in
Addendum #2 to the purchase agreement must begin before the
language of that provision controls the outcome of this case. If it began,
there was no written notice of a refusal to purchase the property, as the
main opinion notes. But, if the period did not begin, which the parties
dispute in this appeal, the provision providing for written notice of a
refusal to purchase did not apply. Nevertheless, there was still no
refusal of the purchase of the property preventing the transaction's
closing.
Further, I see nothing supporting the trial court's separate
holding that the purchase agreement "expired" because of a purported
lapse of the due-diligence period. Addendum #2 indicates that a failure
to refuse to purchase of the property, in writing, during the due-
diligence period amounted to an acceptance of the sale and that the
parties would proceed to the transaction's closing. As noted above, no
refusal took place.
Wise and Bryan, JJ., concur.
11