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Matador Holdings, Inc. and HoPo Realty Investments, LLC filed separate appeals to challenge elements of a circuit court's order involving commercial property owned by Matador. Matador sued HoPo for payment for materials and services Matador provided to HoPo's lessee Stratford Plastic Components of Alabama. The lease agreement contained provisions allowing for HoPo or its agents to enter the property during the lease-term to make inspections or repairs. Stratford had applied for and received a line of credit with Matador. After taking possession of the leased property, Stratford ordered materials from Matador to convert the property into one suitable for Stratford's production needs. Stratford vacated the property before the lease term expired without paying Matador for the materials. HoPo's agents testified that Stratford did not request any changes be made to the leased property and had no knowledge that Matador would supply materials to the lessee. To resolve the dispute, the trial court denied Matador's claim that HoPo was unjustly enriched by the services provided to Stratford that were unpaid, but the court placed a lien on HoPo's property for the unexpired portion of the Stratford lease. Upon review of the trial court record and its order, the Supreme Court affirmed the lower court's denial of Matador's unjust enrichment claim. Furthermore, the Court reversed the lower court's order insofar as it enforced any portion of a lien against HoPo's property or the improvements made to the property. The Court ruled the lien void.
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SUPREME COURT OF ALABAMA
SPECIAL TERM, 2011
Matador Holdings, Inc., d/b/a Davis-Dyar Supply Company
HoPo Realty Investments, L.L.C.
HoPo Realty Investments, L.L.C.
Matador Holdings, Inc., d/b/a Davis-Dyar Supply Company
Appeals from Lee Circuit Court
Matador Holdings, Inc., d/b/a Davis-Dyar Supply Company
("Matador"), and HoPo Realty Investments, L.L.C. ("HoPo"),
have filed separate appeals challenging elements of an order
entered by the Lee Circuit Court in a proceeding involving
commercial property owned by Matador.
Matador, which is in
the business of selling building materials, sued HoPo and
Matador provided Stratford at commercial property owned by
The issues at trial and to be resolved on appeal
center around a materialman's lien and a claim of
We consolidated the appeals for the purpose of
writing one opinion.
Factual Background and Procedural History
On or about December 12, 2008, Stratford entered into an
agreement to lease a commercial structure from HoPo. 2
Matador's claims against Stratford and HoPo's crossclaims against Stratford were resolved before trial, and
consent judgments were entered as to those claims. Nothing in
this opinion impacts those consent judgments.
The lease was scheduled to begin on December 15, 2008,
and end on December 31, 2013.
The lease agreement provided that
Stratford was to "use the premises for manufacturing, storage,
and distribution of plastic components, and for no other use."
improvements to the property, as follows:
"No alterations or improvements will be made by
[Stratford] without [HoPo's] prior written consent.
Such consent will not be unreasonably withheld.
"If [HoPo] consents, [Stratford] has the right to
perform alterations and improvements anytime during
the term of this lease.
"But, in all cases, [HoPo] will not consent to such
installation, alterations, or improvements until the
following conditions have been met before work
"[Stratford] submits plans to [HoPo] bearing
licensed architect's or engineer's stamp.
"The construction must be performed by contractors
suitable to [HoPo]. All contractors must have local
business licenses, and provide to [HoPo's agent]
proof of liability, and workman's compensation
"All work will be done in a good and workmanlike
manner and in compliance with any applicable
governmental rules and regulations and the cost
thereof will be paid by [Stratford] in cash or in
equivalent, so that the leased premises will at all
times be free of liens for labor and materials
supplied or claimed to have been supplied to the
Any alterations and improvements
other than trade fixtures will immediately become
the property of [HoPo], subject only to the use of
same by [Stratford] during the term of this lease.
"Trade fixtures are the personal property of
[Stratford]. [Stratford] may remove trade fixtures
[Stratford] does not remove trade fixtures upon
vacating the premises, then [HoPo], at [its] sole
discretion, may have the fixtures removed on behalf
of [Stratford]. In all cases, [Stratford] will bear
the full cost, including labor and materials, of
removing trade fixtures and repairing any damage
caused by such removal."
The lease agreement further provided:
"Nothing contained in this lease will authorize
[Stratford] to do any act which may create or be the
encumbrance upon the reversion or other estate of
[HoPo], or of any interest of [HoPo] in the leased
improvements thereof; it being agreed that should
additions, improvements or repairs to be made to the
leased premises, or cause materials to be furnished
or labor to be performed therein or thereon, neither
[HoPo] nor the leased premises will, under any
circumstances, be liable for the payment of any
expense incurred or for the value of any work done
or material furnished to the leased premises or any
part thereof. [Stratford] will upon request deliver
such documents as may be required by [HoPo] in order
to effectuate the lien protection required by this
paragraph; all such alterations, changes, additions,
improvements and repairs and materials and all labor
will be at [Stratford's] expense and [Stratford]
contractors, laborers and materialmen furnishing
labor and material to said premises and building or
any part thereof.
If, because of any act or
omission of [Stratford], any mechanic's or other
lien or order for the payment of money will be filed
against the leased premises or any building or
improvement thereon, or against [HoPo] (whether or
not such lien or order is valid or enforceable as
"[Stratford] will, at [Stratford's] own cost and
expense, within fifteen (15) days after the date of
filing thereof, cause the same to be canceled and
discharged of record, or furnish [HoPo] with a
surety bond issued by a surety company reasonably
satisfactory to [HoPo], protecting [HoPo] from any
loss because of nonpayment of such lien and further
will indemnify and save harmless [HoPo] from and
against any and all costs, expenses, claims, losses
or damages, including reasonable counsel fees,
resulting thereupon or by reason thereof." 3
The lease agreement contained provisions allowing for HoPo
and/or its agents to enter the property during the term of the
lease for matters such as inspections or making repairs or
additions or alterations to the property.
Stratford had applied for and been given a line of credit
with Matador in September 2008.
After taking possession of
The lease agreement contained a "Captions" section, which
provides that "[t]he paragraph captions contained herein are
for convenience only and do not define, limit or construe the
contents of such paragraphs and are in no way to be construed
as a part of this lease." The text in the above-quoted holdharmless paragraphs clearly included situations involving
additions or improvements.
Thus, although the above-quoted
hold-harmless paragraphs were included in the section of the
lease agreement captioned "Maintenance and Repair of the
Leased Premises," their placement there does not impact our
review of the language in those paragraphs.
the leased property, Stratford ordered from Matador materials
suitable for Stratford's production needs.
agreement totaled $59,057.62.
The materials and
Stratford apparently converted
the leased property to a manufacturing facility but vacated
the property before the lease term expired without paying
Matador for the materials.
Howard Porter testified that he was a member of HoPo and
also of Porter Properties, LLC, which was the rental agent for
the leased property.
Porter stated that the lease was an "as-
is" lease and that Stratford did not request that HoPo make
any changes to the building for it to enter into the lease
Porter testified that the property manager went to
collect the rent payment and that Stratford was behind on its
rent "pretty much from the beginning."
Porter also testified
that the leasing agent likely went to the property a few times
but that he was not certain because that individual
agreement was signed.
Porter testified that Tracey Davis Allen, the owner of
Matador, contacted him by telephone and informed him that
Stratford had not paid for materials Matador had supplied to
convert the leased property to a production facility.
stated that after receiving the telephone call from Allen, "we
notified [Stratford] that [it] needed to clean that up under
the terms of the lease."
Porter further testified that he had no knowledge before
the lease agreement was signed
that Matador was going to
supply materials to the leased property.
He stated that, even
though it was not unusual to receive notice from a supplier
that work was being performed on a leased property or that
materials were being supplied to that property, they did not
receive any such notice from Matador in this case.
further stated that Stratford did provide a "rough layout of
the office [partition], office area that was being added" but
that he did not believe that any blueprints for electrical
installations or any plans bearing the stamp of a licensed
architect or engineer were ever provided to HoPo.
testified that Stratford did not seek approval from HoPo to
allow Matador to perform any work or to supply materials.
Porter claimed that the only knowledge he had that Matador had
provided any materials to Stratford at the leased property was
the telephone call from Allen and a lien subsequently filed by
Porter stated that he never agreed to pay for any
materials supplied to Stratford and that when the topic was
brought up by Allen he told her that payment for the materials
was between her and Stratford.
Porter further testified that he told either Allen or an
independent contractor who performed the work converting the
leased property that Matador was welcome to retrieve any of
the materials it had supplied, provided that it caused no
damage to the structure of the building in retrieving the
He reiterated that position at trial.
several prospective tenants since Stratford's departure, but
the property had not been leased.
He stated that some of the
alterations that were performed could be viewed as beneficial
to some potential tenants but detrimental to other potential
Further, Porter testified that substantial work
would have to be performed to prepare the property before
another tenant could move in because of the condition of
various piping, conduits, etc., that remained after Stratford
vacated the premises.
Allen testified that she was the owner of Matador.
stated that all the materials ordered by Stratford either were
delivered from Matador's facility to the leased property by
one of Matador's delivery trucks or were shipped directly from
a supplier/manufacturer to the leased property.
According to Allen, she telephoned Porter around the same
time Matador was filing a materialman's lien on the building
in March 2009 for the materials Matador had supplied.
defaulted on its rent to HoPo at that point.
that Porter told her she should seek legal counsel.
further testified that she told Porter that HoPo would likely
attorney and was proceeding with the legal process.
Allen informed the trial court that Matador's invoices
spanned the period from approximately November 2008 to March
2009 and that, at the time she spoke with Porter and filed the
lien, Matador had provided all the materials for which it now
According to Allen, Matador sells new
building materials and does not have any market for or use for
used building materials.
Matador presented unpaid invoices
totaling $47,915.24 for materials provided to Stratford for
converting the leased property.
Matador and that he continued to assist the company on an asneeded basis.
Dyar testified that he visited the premises
Stratford moved in, and he discussed the types of
upgrades in lighting, electrical, heating and cooling, piping,
etc., that needed to be performed to convert the building from
a warehouse facility to a production facility.
Dyar testified that the upgrades in lighting would be
beneficial to a tenant other than Stratford.
testified that the piping for compressed air systems and the
potential production tenants but would not be beneficial to
potential warehouse tenants.
Dyar testified that he believed
supplied could be removed without damaging the building, they
were of no use to Matador once they were removed.
Mike Carter testified that he was employed by Porter
Properties and that he was the property manager for the leased
property after Stratford's departure.
All the testimony at trial indicated that nobody from
Matador had informed anyone at HoPo that Matador would be
supplying materials for Stratford to use in converting the
By all accounts, it appears that the first
knowledge HoPo had that Matador had supplied any materials to
Stratford was in March 2009, when Allen telephoned Porter and
the materialman's lien was filed.
After hearing testimony and accepting evidence and briefs
resolving the claims between Matador and HoPo, as follows:
"IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that
Matador's judgment against the Stratford Defendants
previously entered by the Court is SECURED by a lien
arising under § 35-11-212, Ala. Code (1975), which
attaches to the goods and materials furnished by
Matador to Stratford and incorporated into the
Warehouse, but only to the extent that such goods
and materials can be identified and removed from the
Warehouse without damage to the Warehouse or the
real property on which it is situated. HoPo shall
permit Matador to enter the Warehouse after notice
to HoPo for the purpose of removing such goods and
materials, which Matador may then sell in the manner
provided for by law.
"IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that
Matador's judgment against the Stratford Defendants
previously entered by the Court is also SECURED by
a lien which attaches to the unexpired term of the
Lease between HoPo and [Stratford], and which may be
executed upon only in the manner specified, and in
accordance with the procedures set forth, in § 3511-212, Ala. Code (1975).
"IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that,
except as specifically allowed and declared in this
Judgment, the lien claimed by Matador in its
Verified Statement of Lien recorded at Misc. Book
1289, at Page 45, in the Office of the Judge of
Probate for Lee County, Alabama, is null and void,
and does not attach to any other real or personal
property, or any interest therein.
"IT IS FURTHER HEREBY ORDERED, ADJUDGED, AND DECREED
that Matador's claim of unjust enrichment against
HoPo is due to be and the same is hereby DENIED." 4
(capitalization in original.)
Matador filed a postjudgment motion to vacate or amend
the judgment, and HoPo filed a response.
Ala.R.Civ.P., after 90 days.
These appeals followed.
Standard of Review
"Because the trial court heard ore tenus
evidence during the bench trial, the ore tenus
standard of review applies. Our ore tenus standard
of review is well settled.
'"When a judge in a
nonjury case hears oral testimony, a judgment based
on findings of fact based on that testimony will be
Consent judgments were also entered against Stratford in
the amount of $68,934.24 for Matador and $790,043.16 for HoPo
(see supra note 1). Those amounts included principal and
attorney fees, as well as compensatory damages and/or
presumed correct and will not be disturbed
except for a plain and palpable error."'
Muchia, 854 So. 2d 85, 92 (Ala. 2003)
Allstate Ins. Co. v. Skelton, 675 So. 2d
"'"The ore tenus rule is grounded upon the
principle that when the trial court hears
oral testimony it has an opportunity to
evaluate the demeanor and credibility of
Hall v. Mazzone, 486 So. 2d
408, 410 (Ala. 1986). The rule applies to
"disputed issues of fact," whether the
testimony or upon a combination of oral
testimony and documentary evidence. Born
v. Clark, 662 So. 2d 669, 672 (Ala. 1995).
succinctly stated, is as follows:
"'"[W]here the evidence has been
conclusion on issues of fact, and
this Court will not disturb the
trial court's conclusion unless
against the great weight of the
evidence, but will affirm the
judgment if, under any reasonable
"Reed v. Board of Trs. for Alabama State Univ., 778
So. 2d 791, 795 (Ala. 2000) (quoting Raidt v. Crane,
342 So. 2d 358, 360 (Ala. 1977)).
presumption [of correctness] has no application when
the trial court is shown to have improperly applied
the law to the facts.'
Ex parte Board of Zoning
Adjustment of Mobile, 636 So. 2d 415, 417 (Ala.
Kennedy v. Boles Invs., Inc., 53 So. 3d 60, 67-68 (Ala. 2010).
Unjust-Enrichment Claim (Case no. 1091700)
Matador argues that the trial court erred in denying its
claim that it was entitled to recover from HoPo under the
theory of unjust enrichment.
HoPo argues that the facts do
not establish the elements of an unjust-enrichment claim.
"To prevail on a claim of unjust enrichment under
Alabama law, a plaintiff must show that: (1) the
defendant knowingly accepted and retained a benefit,
(2) provided by another, (3) who has a reasonable
expectation of compensation.
See American Family
Care, Inc. v. Fox, 642 So. 2d 486, 488 (Ala. Civ.
Portofino Seaport Vill., LLC v. Welch, 4 So. 3d 1095, 1098
"'One is unjustly enriched if his retention of a
benefit would be unjust.' Jordan v. Mitchell, 705
Restatement of Restitution: Quasi Contracts and
Constructive Trusts, § 1, Comment c. (1937)). The
Jordan court continued:
"'Retention of a benefit is unjust if (1)
the donor of the benefit ... acted under a
mistake of fact or in misreliance on a
right or duty, or (2) the recipient of the
benefit ... engaged in some unconscionable
conduct, such as fraud, coercion, or abuse
of a confidential relationship. In the
absence of mistake or misreliance by the
donor or wrongful conduct by the recipient,
the recipient may have been enriched, but
he is not deemed to have been unjustly
"705 So. 2d at 458."
Welch v. Montgomery Eye Physicians, P.C., 891 So. 2d 837, 843
There was no evidence indicating that Matador made a
mistake of fact in providing the materials to the project, nor
is there any evidence indicating that HoPo purported to accept
any responsibility or liability for those materials to induce
contrary, it is clear from the record that HoPo was not aware
that Matador had supplied the materials until after Matador
had fulfilled all Stratford's orders and the conversion of the
facility was completed.
Further, the testimony indicated that
although some of the improvements may be beneficial to another
prospective tenant, some of the improvements would be suitable
only for production tenants and even then only to a portion of
that type of tenant.
Finally, HoPo has offered to allow
Matador to remove from the leased property any materials it
supplied that could be removed without damage to the building.
In short, there was conflicting evidence as to whether HoPo
knowingly obtained the benefit or whether it is insisting on
support the trial court's judgment;
therefore, the trial
court's judgment is affirmed.
Materialman's Lien (Case no. 1091790)
Matador's materialman's lien on the leased property because,
property and thereby caused the lien to arise.
Matador argues that it is clear from the terms of the
lease agreement that HoPo was aware that Stratford was going
to be converting the building from a warehouse facility to a
provided HoPo with a blueprint or floorplan of the proposed
construction at the time Stratford entered into the lease
knowledge of the improvements because employees or agents of
HoPo went to the premises on multiple occasions to collect
Section 35-11-212, Ala. Code 1975, provides for liens
against leased lands, as follows:
"(a) When the building or improvement is erected
under or by virtue of any contract with a lessee in
possession, and the erection thereof is not in
violation of the terms or conditions of the lease,
improvement, and to the unexpired term of the lease,
and the holder of the lien shall have the right to
avoid a forfeiture of the lease by paying rent to
the lessor, as it becomes due and payable, or by the
performance of any other act or duty to which the
lessee may be bound; and if the lien is enforced by
a sale of the building or improvement, the purchaser
may, at his election, become entitled to the
possession of the demised premises, and to remain
therein for the unexpired term, by paying rent to
the lessor, or performing any other act or duty to
which the lessee was bound, as if he were the
assignee of the lease; or he may, within 60 days
after the sale, remove such building or improvement
from the premises; and if he elects to take
expiration of the term of the lease, he may, within
a reasonable time after the expiration of the term,
remove such building or improvement from the
premises. If, before a sale, the holder of the lien
has made any payments of rent, or other pecuniary
compensation to the lessor, which ought to have been
paid by the lessee, he shall be reimbursed for such
payments from the proceeds of the sale.
"(b) When a lien attaches under subsection (a),
the lessor, at any time before a sale of the
property, shall have a right to discharge the same,
by paying to the holder the amount secured thereby,
including costs and all moneys he may have paid to
the lessor to prevent a forfeiture of the lease,
and, after a sale, he shall have the right to
prevent the removal of the building or improvement
from the premises by paying to the purchaser the
value of such building or improvement; and upon such
payment, either to the holder of the lien or to the
purchaser, such building or improvement shall become
the property of the lessor."
It is clear that HoPo was aware that some construction on
the building would be required to make the building suitable
for Stratford's needs.
The undisputed evidence indicated that
Stratford provided a "floor plan" of its intended additions to
evidence is equally undisputed that many terms of the lease
payment by Stratford for the materials and construction in
Thus, because Stratford violated the terms of its
lease in the manner in which it obtained the additions to the
leased premises, we cannot hold that Matador's lien against
HoPo's property is proper.
Thus, the trial court erred in
upholding the lien in this regard.
We affirm the trial court's denial of Matador's unjustenrichment claim against HoPo in case no. 1091700.
that the trial court should have found the materialman's lien
filed by Matador pursuant to § 35-11-212, Ala. Code 1975,
Therefore, in case no. 1091790 we reverse the
We need not resolve the factual dispute regarding whether
Stratford had also breached the terms of its lease regarding
its monetary obligations to HoPo at the time the materials
were supplied by Matador.
trial court's order insofar as it enforces any portion of the
property, and we remand the case for that court to enter an
order declaring that lien void.
1091700 -- AFFIRMED.
1091790 -- REVERSED AND REMANDED WITH DIRECTIONS.
Woodall, Bolin, and Shaw, JJ., concur.
Murdock, J., concurs in the result.