Luis Enriquez v. Kokomo Properties, LLC

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REL: 12/4/09 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2009-2010 2080687 L u i s Enriquez v. Kokomo P r o p e r t i e s , LLC Kokomo P r o p e r t i e s , LLC v. L u i s Enriquez Appeals from Montgomery C i r c u i t (CV-08-900561) Court 2080687 BRYAN, J u d g e . Luis judgment Enriquez, in plaintiff which below, the the defendant trial below, court found Kokomo P r o p e r t i e s , LLC breach-of-contract claim and that i t was entitled amount of $89,125 rather appeal, we a f f i r m the t r i a l in from favor ("Kokomo"), than to from t h a t recover $62,000. damages As to cause w i t h On May a the on i t s the judgment, in the Enriquez's c o u r t ' s j u d g m e n t ; as t o Kokomo's c r o s s - a p p e a l , we r e v e r s e t h e t r i a l c o u r t ' s j u d g m e n t and the of a w a r d e d Kokomo damages i n amount o f $ 6 2 , 0 0 0 . Kokomo c r o s s - a p p e a l s asserting appeals remand instructions. 29, 2008, Kokomo s u e d E n r i q u e z , s t a t i n g a c l a i m of b r e a c h o f c o n t r a c t . As t h e f a c t u a l b a s i s o f i t s c l a i m , Kokomo a l l e g e d that Enriquez Kokomo i n May to had 2007 ( " t h e entered a written lease l e a s e " ) i n which Enriquez had with agreed l e a s e a b u i l d i n g l o c a t e d on R o s a P a r k s D r i v e i n Montgomery ("the b u i l d i n g " ) f o r a term of t h r e e y e a r s b e g i n n i n g 2007, and e n d i n g on A p r i l 30, the into amount possession "Club of $12,000 per 2010, year; o f t h e b u i l d i n g and had L o k i y a " i n the and that 1, t o p a y Kokomo r e n t i n Enriquez operated had taken a n i g h t c l u b named b u i l d i n g ; that Enriquez 2 on May had paid rent 2080687 t h r o u g h S e p t e m b e r 2007 b u t h a d s t o p p e d p a y i n g rent t h e r e a f t e r ; t h a t t h e l e a s e c o n t a i n e d a p r o v i s i o n s t a t i n g t h a t , a t Kokomo's e l e c t i o n , the rent Enriquez of the lease Enriquez would failed was t o p a y d u r i n g t h e e n t i r e t e r m become immediately due t o pay any i n s t a l l m e n t Kokomo was e l e c t i n g t o a c c e l e r a t e of r e n t ; lease provided than As r e l i e f , damages i n an amount e q u a l Kokomo f o r breach of the lease purpose lease was of the lease defense V a l e r i e Carmichael, him to enter could operate license rather s o u g h t an a w a r d o f rent Enriquez of As and a s s e r t e d , as a f f i r m a t i v e and u n e n f o r c e a b l e ; the factual illegality, Enriquez that basis of h i s alleged that a c t i n g a s an a g e n t o f Kokomo, h a d i n d u c e d i n t o the lease a d e n i e d t h a t he was had been f r u s t r a t e d ; and t h a t t h e unconscionable. affirmative that the e n t i r e term of the lease p l u s a l a t e f e e . d e f e n s e s , t h a t t h e l e a s e was i l l e g a l the that t o t h e t o t a l amount o f u n p a i d A n s w e r i n g Kokomo's c o m p l a i n t , liable to allege t h a t t h e r e n t was $30,000 p e r y e a r $12,000 p e r y e a r . payable during and the rent pursuant to that p r o v i s i o n . Kokomo l a t e r amended i t s c o m p l a i n t the and p a y a b l e i f nightclub by promising Enriquez i n the b u i l d i n g using that a liquor i s s u e d t o her, which c o n s t i t u t e d a v i o l a t i o n 3 he of the 2080687 Alabama Administrative affirmative defense Code. of As the f a c t u a l basis frustration of of h i s purpose, Enriquez a l l e g e d t h a t t h e Alabama A l c o h o l i c Beverage C o n t r o l B o a r d had closed h i s nightclub due t o h i s u s e o f t h e l i q u o r l i c e n s e issued to Carmichael. As t h e f a c t u a l b a s i s o f h i s a f f i r m a t i v e defense of u n c o n s c i o n a b i l i t y , Enriquez a l l e g e d that the lease was u n c o n s c i o n a b l e b e c a u s e Kokomo o r C a r m i c h a e l , knew or Enriquez to should have known that leasing i t s agent, the b u i l d i n g to t o operate a nightclub using a l i q u o r l i c e n s e issued someone else would cause Enriquez to experience legal problems. The trial c o u r t h e l d a bench t r i a l evidence ore tenus. Thereafter, court entered a judgment breach-of-contract a t which i t r e c e i v e d on F e b r u a r y 2, 2009, t h e t r i a l f i n d i n g i n favor o f Kokomo on i t s c l a i m a n d a w a r d i n g Kokomo damages i n t h e amount o f $62,000. The t r i a l c o u r t d i d n o t make a n y s p e c i f i c findings of fact. Following trial to t h e e n t r y o f t h e judgment, E n r i q u e z court to a l t e r , Rule 59(e), amend, o r v a c a t e t h e j u d g m e n t p u r s u a n t A l a . R. evidence at t r i a l moved t h e C i v . P., on the grounds that h a d e s t a b l i s h e d t h a t t h e l e a s e was 4 the illegal 2080687 and t h a t Kokomo h a d f a i l e d moved the t r i a l court, to mitigate pursuant i t s damages. to Rule 59(e), Kokomo to alter or amend t h e j u d g m e n t t o a w a r d Kokomo damages i n t h e amount o f $89,125, on t h e g r o u n d t h a t t h e u n d i s p u t e d evidence at t r i a l had e s t a b l i s h e d t h a t E n r i q u e z owed Kokomo u n p a i d r e n t t o t a l i n g $77,500 p l u s a l a t e f e e e q u a l t o 1 5 % o f t h e $77,500 i n u n p a i d rent. Following a hearing, the trial court denied both p a r t i e s ' postjudgment motions. Enriquez t i m e l y a p p e a l e d t o t h e supreme c o u r t , a n d Kokomo timely cross-appealed t o t h e supreme c o u r t . The supreme c o u r t t r a n s f e r r e d b o t h t h e a p p e a l and t h e c r o s s - a p p e a l to this court p u r s u a n t t o § 1 2 - 2 - 7 ( 6 ) , A l a . Code 1975. Because the t r i a l court r e c e i v e d evidence ore tenus, the f o l l o w i n g p r i n c i p l e s govern our review of i t s judgment: "'"'[W]hen a trial court hears ore tenus testimony, i t s f i n d i n g s on d i s p u t e d facts are p r e s u m e d c o r r e c t a n d i t s j u d g m e n t b a s e d on t h o s e f i n d i n g s w i l l n o t be r e v e r s e d u n l e s s t h e j u d g m e n t i s p a l p a b l y e r r o n e o u s o r m a n i f e s t l y u n j u s t . ' " ' Water Works & S a n i t a r y Sewer Bd. v. P a r k s , 977 So. 2d 440, 443 ( A l a . 2007) ( q u o t i n g F a d a l l a v. F a d a l l a , 929 So. 2d 429, 433 ( A l a . 2 0 0 5 ) , q u o t i n g i n t u r n P h i l p o t v. S t a t e , 843 So. 2d 122, 125 ( A l a . 2 0 0 2 ) ) . '"The p r e s u m p t i o n o f c o r r e c t n e s s , however, i s r e b u t t a b l e and may be overcome where t h e r e i s i n s u f f i c i e n t evidence presented to the t r i a l court to s u s t a i n i t s j u d g m e n t . " ' Waltman v. R o w e l l , 913 So. 2d 1083, 1086 ( A l a . 2005) ( q u o t i n g D e n n i s v. Dobbs, 474 So. 2d 77, 5 2080687 79 ( A l a . 1 9 8 5 ) ) . ' A d d i t i o n a l l y , t h e o r e t e n u s r u l e does n o t e x t e n d t o c l o a k w i t h a p r e s u m p t i o n o f c o r r e c t n e s s a t r i a l judge's c o n c l u s i o n s of law or the i n c o r r e c t a p p l i c a t i o n of law t o the facts.' Waltman v. R o w e l l , 913 So. 2d a t 1086." R e t a i l D e v e l o p e r s o f A l a b a m a , LLC Inc., 985 trial c o u r t ' s j u d g m e n t d o e s n o t c o n t a i n any of fact, findings 910 So. So. we 2d 924, must 1274, that to support 1275 Club, ( A l a . 2007). Moreover, because assume necessary 2d 929 v. E a s t Gadsden G o l f the the trial specific findings judge made j u d g m e n t . D i g g s v. ( A l a . C i v . App. the those Diggs, 2005). " F i n a l l y , we n o t e t h a t ' [ i ] n o r e t e n u s proceedings t h e t r i a l c o u r t i s t h e s o l e j u d g e o f t h e f a c t s and of the credibility of w i t n e s s e s , ' and 'we are r e q u i r e d t o r e v i e w t h e e v i d e n c e i n a l i g h t most f a v o r a b l e t o t h e p r e v a i l i n g p a r t [ y ] , ' .... D r i v e r v. H i c e , 618 So. 2d 129, 131 ( A l a . C i v . App. 1 9 9 3 ) ; see a l s o F i r s t H e a l t h , I n c . v. B l a n t o n , 585 So. 2d 1331, 1332 ( A l a . 1991) (reviewing evidence i n the l i g h t most f a v o r a b l e t o t h e p r e v a i l i n g p a r t y where t h e t r i a l c o u r t ' s j u d g m e n t was e n t e r e d a f t e r an ore tenus proceeding)." Architectura, App. I n c . v. M i l l e r , 769 So. 2d 330, that the trial 332 (Ala. Civ. 2000). Enriquez finding because, first i n favor he of says, argues Kokomo on (1) parol erred i t s breach-of-contract or extrinsic a d m i s s i b l e t o m o d i f y t h e t e r m s o f t h e l e a s e due 6 court evidence in claim was to both l a t e n t 2080687 and patent ambiguities established and i n the that Carmichael, he h a d e n t e r e d lease; (2) his testimony a c t i n g as t h e a g e n t o f Kokomo, i n t o a s i d e agreement, which m o d i f i e d t h e l e a s e by p r o v i d i n g t h a t C a r m i c h a e l would a l l o w Enriquez t o use a l i q u o r l i c e n s e issued t o her to operate a nightclub i n the building and t h a t Enriquez would be required t o pay rent p u r s u a n t t o t h e l e a s e o n l y so l o n g as C a r m i c h a e l c o n t i n u e d t o allow him t o use the l i q u o r license issued t o h e r ; (3) C a r m i c h a e l f a i l e d t o renew h e r l i q u o r l i c e n s e i n O c t o b e r 2007; and (4) when E n r i q u e z t o l d C a r m i c h a e l i n O c t o b e r 2007 t h a t he c o u l d no l o n g e r p a y t h e r e n t p u r s u a n t t o t h e l e a s e b e c a u s e she had n o t r e n e w e d h e r l i q u o r l i c e n s e , she s a i d Enriquez "fine." d i d n o t o f f e r a w r i t t e n document memorializing the a l l e g e d s i d e agreement between him and C a r m i c h a e l . the only alleged trial evidence tending t o prove the existence s i d e a g r e e m e n t was h i s t e s t i m o n y . court, as the sole c r e d i b i l i t y of the witnesses, testimony regarding the judge of side that Consequently, the the facts c o u l d have f o u n d t h a t alleged of Thus, agreement and the Enriquez's was not c r e d i b l e and, hence, t h a t t h e a l l e g e d s i d e agreement d i d n o t exist. See A r c h i t e c t u r a , I n c . v . M i l l e r , 7 769 So. 2d a t 332. 2080687 M o r e o v e r , b e c a u s e t h e t r i a l c o u r t made no s p e c i f i c f i n d i n g s o f f a c t , we must assume t h a t t h e t r i a l c o u r t made t h o s e f i n d i n g s t h a t w o u l d s u p p o r t i t s j u d g m e n t . See 2d a t 1275. Accordingly, found Enriquez's that a g r e e m e n t was court not Enriquez's f i r s t D i g g s , 910 must assume t h a t t h e testimony c r e d i b l e and, found t h a t the Second, we D i g g s v. regarding the trial court alleged side consequently, t h a t the s i d e agreement d i d not e x i s t . argument has Enriquez argues no Therefore, that the trial court erred t h a t Kokomo was Kokomo's r e p r e s e n t a t i v e not making u n a u t h o r i z e d removal of his seeking lease testified damages f o r E n r i q u e z ' s a l l e g e d l y a l t e r a t i o n s to the b u i l d i n g or E n r i q u e z ' s property p r o v i s i o n s of the at t r i a l in accelerate the r e n t i f E n r i q u e z d e f a u l t e d i n h i s performance of the says, trial merit. g i v i n g e f f e c t t o t h e p r o v i s i o n a l l o w i n g Kokomo t o b e c a u s e , he So. lease from the building. The pertinent state: " I t i s agreed that i f [Enriquez] s h a l l f a i l to pay any one o f t h e above d e s c r i b e d i n s t a l l m e n t s o f r e n t a t m a t u r i t y o r f a i l t o p e r f o r m any o f the p r o v i s i o n s of t h i s Lease, then, at the e l e c t i o n of [Kokomo], a l l o f t h e r e m a i n i n g i n s t a l l m e n t s s h a l l a t once become due and p a y a b l e and [Kokomo] may t r e a t them as due and payable without notice to [ E n r i q u e z ] . [ E n r i q u e z ] h e r e b y w a i v e s n o t i c e o f any d e f a u l t under t h i s c o n t r a c t . 8 2080687 " [ E n r i q u e z ] h e r e b y f u r t h e r c o v e n a n t s t h a t i f any d e f a u l t i s made i n t h e payment o f s a i d r e n t o r any p a r t t h e r e o f , a t t h e t i m e above s p e c i f i e d , o r i f d e f a u l t be made i n t h e p e r f o r m a n c e o f a n y o f t h e covenants o r agreements h e r e i n c o n t a i n e d , o r i f t h e l e a s e d p r e m i s e s s h a l l be a b a n d o n e d o r become v a c a n t during the term of t h i s lease without [Enriquez] having p a i d i n f u l l the rent f o r the e n t i r e time, t h e s a i d l e a s e , a t t h e o p t i o n o f [Kokomo], s h a l l w h o l l y c e a s e a n d t e r m i n a t e , a n d [Kokomo] s h a l l a n d may r e - e n t e r t h e s a i d p r e m i s e s a n d remove a l l persons and p r o p e r t y therefrom; and [Enriquez] hereby e x p r e s s l y waives t h e s e r v i c e o f any n o t i c e o f i n t e n t i o n to re-enter, notice t o terminate the t e n a n c y , n o t i c e t o q u i t o r demand f o r p o s s e s s i o n , o r [Kokomo] s h a l l have t h e r i g h t a t [ i t s ] o p t i o n t o take p o s s e s s i o n o f t h e l e a s e d premises and t o l e t t h e same as t h e a g e n t o f [ E n r i q u e z ] a n d a p p l y t h e proceeds r e c e i v e d from such l e t t i n g towards t h e payment o f t h e r e n t due b y [ E n r i q u e z ] u n d e r t h i s l e a s e and such r e - e n t e r i n g and r e - l e t t i n g s h a l l n o t discharge [Enriquez] from l i a b i l i t y f o r rent or o t h e r charges, n o r from any o t h e r o b l i g a t i o n s under the terms o f t h i s l e a s e , o r a t t h e o p t i o n o f [Kokomo] t h e r e n t f o r t h e e n t i r e t e r m s h a l l a t once become due a n d p a y a b l e a n d [Kokomo] may p r o c e e d t o t h e c o l l e c t i o n o f r e n t f o r t h e e n t i r e t e r m as i f b y the terms o f t h i s l e a s e t h e e n t i r e r e n t f o r t h e e n t i r e t e r m s h o u l d be made p a y a b l e i n a d v a n c e . These p r o v i s i o n s , h o w e v e r , a r e n o t t o be c o n s t r u e d a s l i m i t i n g [Kokomo's] l e g a l r i g h t s b u t a r e i n a d d i t i o n to such e x i s t i n g r i g h t s . II " I t i s f u r t h e r agreed by and between t h e p a r t i e s to t h i s c o n t r a c t t h a t no a l t e r a t i o n s , r e p a i r s , c h a n g e s o r i m p r o v e m e n t s a r e t o be made i n , o r t o t h e premises herewith leased, without the consent i n w r i t i n g o f [Kokomo], e x c e p t s u c h as a r e n e c e s s a r y for the proper care and maintenance of the premises." 9 2080687 (Emphasis added.) The p e r t i n e n t p r o v i s i o n s o f t h e l e a s e a u t h o r i z e Kokomo t o accelerate the rent i f Enriquez fails t o pay any installment o f r e n t ; t h e y do n o t p u r p o r t t o c o n d i t i o n s u c h an a c c e l e r a t i o n o f t h e r e n t on Kokomo's p r o s e c u t i o n (1) u n a u t h o r i z e d Enriquez's a l t e r a t i o n s to the b u i l d i n g or property f i n d no m e r i t Third, while the i n Enriquez's rent argues in favor of Kokomo on b e c a u s e , he says, t h e l e a s e was to the alleged However, t h i s a b o v e , we of the side that agreement a r g u m e n t has at the 1275; and trial illegal between court erred we Carmichael in claim and u n e n f o r c e a b l e due and no m e r i t b e c a u s e , as we must assume t h a t t h e t r i a l f a c t s and Therefore, i t s breach-of-contract him. explained c o u r t , as t h e s o l e judge the c r e d i b i l i t y of the w i t n e s s e s , found t h a t the s i d e agreement d i d not e x i s t . 2d i s unpaid. (2) r e m o v a l o f second argument. Enriquez finding o f c l a i m s f o r damages f o r See A r c h i t e c t u r a , Inc. v. D i g g s v. D i g g s , Miller, 769 910 So. So. 2d at erred in 332 . Fourth, finding because, in he Enriquez favor says, of argues that Kokomo on the lease trial court i t s breach-of-contract was 10 the unconscionable. claim Although 2080687 Enriquez does n o t that the lease that the lease was agreement. T h i s the e x i s t e n c e a b o v e , we of the the state the precise unconscionable, was of the no the merit credibility at 1275; and Architectura, he to the arguing alleged side because i t presupposes as we have c o u r t , as t h e See Inc. contends is of the w i t n e s s e s , s i d e agreement d i d not e x i s t . 2d due trial why presume he s i d e a g r e e m e n t and, must assume t h a t t h e f a c t s and we unconscionable a r g u m e n t has reason D i g g s v. v. explained sole judge found that D i g g s , 910 Miller, 769 So. So. 2d at erred in 332. Fifth, Enriquez argues in favor of Kokomo on b e c a u s e , he says, he testified finding understand However, legal we must that the j u d g e o f t h e f a c t s and court i t s breach-of-contract t h a t he documents w r i t t e n assume trial that the claim i s unable to read i n the trial English court, as language. the the c r e d i b i l i t y of the w i t n e s s e s , t h a t E n r i q u e z ' s t e s t i m o n y t o t h e e f f e c t t h a t he and c o u l d not sole found read and u n d e r s t a n d l e g a l d o c u m e n t s w r i t t e n i n t h e E n g l i s h l a n g u a g e was not credible. Architectura, we find See D i g g s v. I n c . v. M i l l e r , no m e r i t D i g g s , 910 769 So. i n Enriquez's f i f t h 11 2d So. 2d a t 1275; a t 332. argument. and Therefore, 2080687 Finally, finding Enriquez i n favor because, argues o f Kokomo he s a y s , Kokomo that the t r i a l court erred i n on i t s b r e a c h - o f - c o n t r a c t failed to mitigate claim i t s damages b y r e n t i n g t h e b u i l d i n g t o someone e l s e f o r t h e r e m a i n d e r o f t h e t e r m o f t h e l e a s e . However, t h e t r i a l following evidence indicating the b u i l d i n g and h a d been that court had before Kokomo h a d t r i e d i t the to rent unsuccessful: "THE COURT: ... Oh, i s t h e p l a c e rented now? "[Kokomo's r e p r e s e n t a t i v e ] : No, i t ' s n o t . ... "THE COURT: left? Has i t been rented since [Enriquez] "[Kokomo's r e p r e s e n t a t i v e ] : No. We t r i e d . Judge." Based on that evidence, we a r g u m e n t t h a t Kokomo f a i l e d the t r i a l court's was l i a b l e In t h e c r o s s - a p p e a l , erred than merit in i n any o f E n r i q u e z ' s Enriquez's arguments, judgment i n s o f a r as i t found i n f a v o r o f Kokomo a n d a g a i n s t E n r i q u e z whether Enriquez no tried, t o m i t i g a t e i t s damages. B e c a u s e we f i n d no m e r i t we a f f i r m find We with respect to the issue f o r breach of contract. Kokomo a r g u e s t h a t the t r i a l i n a w a r d i n g i t damages i n t h e amount o f $62,000 $89,125 b e c a u s e , Kokomo says, 12 t h e award court rather o f $62,000 i s 2080687 u n s u p p o r t e d by t h e e v i d e n c e , which e s t a b l i s h e d w i t h o u t t h a t Kokomo was e n t i t l e d t o r e c o v e r of $77,500 p l u s for rent $11,625 i n l a t e i n t h e amount installments of per would result per year rather than $12,000 p e r y e a r . paid $2,500 charges. The l e a s e per year month. $2,500 Enriquez u n p a i d r e n t i n t h e amount o f $12,000 $2,500 Twelve i n rent of month from paid in installments of per year established that May 2007 S e p t e m b e r 2007 a n d t h a t he f a i l e d t o p a y any r e n t The t r i a l the provided t o be $30,000 The e v i d e n c e each dispute through thereafter. c o u r t c o u l d have found from t h e e v i d e n c e e i t h e r t h a t p a r t i e s intended the annual rent t o be $12,000 a n d that t h e p r o v i s i o n f o r m o n t h l y i n s t a l l m e n t s o f $2,500 was e r r o n e o u s or that $2,500 the p a r t i e s intended and erroneous. not find the f o r annual However, t h e t r i a l comport w i t h any provision the monthly court's installments rent of $12,000 $62,000. T h e r e f o r e , court with respect basis i n the record we must r e v e r s e was a w a r d o f $62,000 d o e s e i t h e r o f t h o s e f i n d i n g s . I n d e e d , we evidentiary t o be f o r an cannot award o f t h e judgment o f t h e t r i a l t o t h e damages a w a r d a n d remand t h e a c t i o n with i n s t r u c t i o n s to the t r i a l with respect court to c l a r i f y t o t h e damages a w a r d i n l i g h t 13 i t s judgment of t h i s opinion. 2080687 C f . S t o n e b r o o k Dev., L.L.C. v . M a t t h e w s B r o s . C o n s t r . Co., 985 So. 2d 960, 967 (reversing ( A l a . C i v . App. 2007) the t r i a l breach-of-contract court's counterclaim (plurality judgment with because a w a r d o f damages on t h a t c o u n t e r c l a i m decision) respect the t r i a l to a court's was u n s u p p o r t e d b y t h e e v i d e n c e and remanding a c t i o n w i t h i n s t r u c t i o n s f o r t h e t r i a l court t o c l a r i f y i t s a w a r d o f damages on t h a t counterclaim). APPEAL -- AFFIRMED. CROSS-APPEAL -- REVERSED AND REMANDED WITH INSTRUCTIONS. Thompson, P . J . , a n d P i t t m a n a n d Moore, J J . , c o n c u r . Thomas, J . , c o n c u r s i n t h e r e s u l t , 14 without writing.

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