Rel:

07/31/2009

Notice: T h i s o p i n i o n i s s u b j e c t t o f o r m a l 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 Reporter of Decisions, A l a b a m a 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 ( ( 3 3 4 ) 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 .

SUPREME COURT OF ALABAMA

SPECIAL TERM, 2009

1071465

Shoney's LLC v. MAC E a s t , LLC Certified Q u e s t i o n from the U n i t e d S t a t e s f o r the Eleventh C i r c u i t (DC-05-01038-CV-F-N) Court o f Appeals

PARKER, This from

Justice. case i s before States LLC this Court ("MAC Court on a c e r t i f i e d question

the United MAC

of Appeals East"),

f o r the Eleventh sued Shoney's LLC

Circuit.

East,

1071465 ("Shoney's")
1

i n state

court,

a l l e g i n g breach that

of

contract.

Specifically, withheld ground

the complaint o f MAC

alleged

Shoney's

wrongfully of a

approval

East's

assignment t o MAC

or sublease East. States

lease

Shoney's

had assigned

Shoney's removed t h e a c t i o n t o t h e U n i t e d Court f o r the Middle D i s t r i c t f o r a summary MAC East's

District filed court by to

o f Alabama. Both p a r t i e s The f e d e r a l district

motions granted

judgment.

motion

and d e n i e d

the motion

filed

Shoney's, a clause

applying

a "commercial

reasonableness" MAC East

standard and

i n t h e agreement the ground lease

between

Shoney's Shoney's,

assigning in

t o MAC E a s t t h a t

allowed

i t ssole d i s c r e t i o n , to withhold Shoney's to appealed the

permission federal Court of

to sublease the court's f o r the

property. decision Eleventh The controlling

district Appeals

the United

States

Circuit. federal appellate i n Alabama court, finding no clear, to Rule

precedent

law, has, pursuant

We n o t e t h a t S h o n e y ' s L L C r e c e n t l y c h a n g e d i t s name t o S h o l a n d L L C . The b r i e f f i l e d w i t h t h i s C o u r t was f i l e d i n t h e name " S h o n e y ' s L L C . "

1

The a c t i o n a l s o i n c l u d e d a c l a i m o f t o r t i o u s i n t e r f e r e n c e with a contractual r e l a t i o n s h i p , a claim that i s not relevant to the question c e r t i f i e d by the Eleventh C i r c u i t Court of Appeals.
2

1071465 18, A l a . R. A p p . P., c e r t i f i e d the following question to this

Court: " U n d e r A l a b a m a l a w , when an a s s i g n m e n t contract gives the assignor 'sole d i s c r e t i o n ' to withhold consent to the assignee's proposed sublease, i s the assignor's exercise of that d i s c r e t i o n subject to a commercial reasonableness standard, o r any o t h e r standard?" MAC East, As LLC v. Shoney's, below, 535 we F.3d answer 1293, 1299 (11th Cir.

2008).

discussed

the question

i n the

negative. Facts Shoney's, agreement Eastern and MAC as on A p r i l a tenant 13, 1979, e n t e r e d for certain into a ground-lease on t h e Shoney's of

property

located

Bypass East

i n M o n t g o m e r y . On F e b r u a r y entered into an "Assignment

20, 2002,

and Assumption under

Lease

Agreement"

("the a s s i g n m e n t

agreement")

which

Shoney's a s s i g n e d ground-lease a shopping

some o f i t s r i g h t s a n d o b l i g a t i o n s u n d e r t h e which intended to develop

a g r e e m e n t t o MAC E a s t , center on t h e p r o p e r t y .

Paragraph following

19 o f t h e a s s i g n m e n t

agreement

contained

the

language: any the the

"Assignee [MAC East] shall not enter into assignment or sublease o f any p o r t i o n of P r o p e r t y or the improvements thereon without 3

1071465 p r i o r w r i t t e n consent of A s s i g n o r [ S h o n e y ' s ] (and L e s s o r , i f r e q u i r e d by t h e L e a s e ) , w h i c h Assignor [ S h o n e y ' s ] may w i t h h o l d i n i t s s o l e d i s c r e t i o n . " On sublease May 9, April the 2005, 18, 2005, to MAC City sent East Cafe the prepared Diners a proposal
3

to On

property MAC to 17,

("City Cafe"). and

East Shoney's

proposal

supporting approval.

documentation On approve and July the

f o r i t s e v a l u a t i o n and

2 0 0 5 , S h o n e y ' s a d v i s e d MAC i f MAC Shoney's East would pay

East that i t would Shoney's i t s 1979 $70,000 ground-

sublease to have

arrange

r e l e a s e d from

lease

agreement.

I t a l s o a d v i s e d MAC

E a s t , a s an i f MAC

alternative, pay

t h a t Shoney's would approve the s u b l e a s e Shoney's 1979 $90,000 and East Shoney's then filed would the

East would

remain

liable

under i t s

l e a s e . MAC

underlying

action.

Analysis The sole question before this Court is whether an

a s s i g n o r ' s r e s e r v a t i o n i n an a s s i g n m e n t a g r e e m e n t o f t h e p o w e r to w i t h h o l d consent assignor's standard, "sole such as t o an assignee's is proposed to sublease any in the

discretion"

subject

mitigating when

a commercial-reasonableness

standard,

I t i s u n c l e a r from the m a t e r i a l s b e f o r e t h i s C o u r t what k i n d of l e g a l e n t i t y " C i t y Cafe D i n e r s " i s , i f i t i s , i n f a c t , a legal entity.

3

1071465 the applicable provision such i n the consent agreement will not does not be contain a

limitation withheld. This Inc. the v.

that

unreasonably

Court

addressed 350 So. 2d

this 1035

issue

i n Homa-Goff

Interiors, to which

Cowden,

( A l a . 1977), f o r the

a case Eleventh

United States Court f o r guidance. Jones

of Appeals

Circuit authored Justice,

looked by

In Homa-Goff, the main o p i n i o n , concurred in by a second

Justice

and

stated: "'Where the lease merely contains a p r o v i s i o n -- w i t h o u t m o r e -- g r a n t i n g a p e r s o n , n o r m a l l y a l a n d l o r d , the power t o withhold consent, regardless of whether explicitly qualified to reasonable e x e r c i s e s o f t h a t p o w e r ... t h e c o u r t s h a v e h e l d the person's r e f u s a l to consent to a p e r s o n a c c e p t a b l e by r e a s o n a b l e c o m m e r c i a l s t a n d a r d s t o be an u n r e a s o n a b l e exercise and thus violative of the lease.' [ A r r i n g t o n v . W a l t e r E. H e l l e r I n t ' l C o r p . , 30 I l l . A p p . 3d 631 , 6 4 0 - 4 1 ,] 333 N . E . 2 d [ 5 0 , ] 58 [ ( 1 9 7 5 ) ] . ( E m p h a s i s a d d e d . ) " G u i d e d b y t h i s r a t i o n a l e , we h o l d t h a t , e v e n where the lease p r o v i d e s an approval clause, a landlord may not unreasonably and capriciously w i t h h o l d h i s consent to a s u b l e a s e agreement. The l a n d l o r d ' s r e j e c t i o n s h o u l d be j u d g e d u n d e r a t e s t applying a reasonable commercial standard." 350 So. 2d who at 1038. Three Justices concurred with Justice

Beatty,

concurred specially, 5

saying,

in part:

1071465 "I concur w i t h t h e m a j o r i t y o p i n i o n of J u s t i c e J o n e s i n w h i c h he m a i n t a i n s t h a t t h e l e s s o r may n o t a r b i t r a r i l y r e j e c t a sublessee chosen by the l e s s e e . In my o p i n i o n , c l a u s e s w h i c h r e s t r i c t subleasing s h o u l d be i n t e r p r e t e d t o c a l l f o r t h e a p p l i c a t i o n o f reasonable commercial standards unless the p a r t i e s themselves expressly agree that the lessor's d e c i s i o n , f o r whatever reason, i s b i n d i n g . This i s so b e c a u s e i t i s p r o b a b l e t h a t when c o n t r a c t i n g t h e p a r t i e s expect each other t o a c t reasonably." 350 So. 2d at 1039 (emphasis added). Justice Bloodworth joined.

dissented Justice

with

an o p i n i o n , w h i c h wrote: dissent.

two o t h e r

Justices

Bloodworth "I

respectfully

"Since 1853, t h i s Court has u p h e l d lease p r o v i s i o n s which provide t h a t t h e r e s h a l l b e no subletting without the express consent of the lessor. S e e : N a v e v . B e r r y , 22 A l a . 382 (1853); Crommelin v. Thiess & C o . , 31 A l a . 412 (1858); M a d d o x v . W e s c o t t , e t a l . , 156 A l a . 2 9 2 , 47 S o . 170 (1 9 0 8 ) ; C i t y G a r a g e & S a l e s C o . v . B a l l e n g e r , 214 Ala. 5 1 6 , 108 S o . 257 ( 1 9 2 6 ) ; F a u c e t t v . P r o v i d e n t M u t . L i f e I n s . C o . o f P h i l a d e l p h i a , 244 A l a . 3 0 8 , 13 So. 2 d 182 ( 1 9 4 3 ) . "To o v e r t u r n a c e n t u r y a n d a q u a r t e r o f e x i s t i n g r e a l estate law without g i v i n g c o n t r a c t i n g p a r t i e s ' f a i r n o t i c e ' i s my p r i n c i p a l c o m p l a i n t w i t h t h e majority's opinion. At the very least, I think the m a j o r i t y o u g h t t o make t h e r u l e t h e y h a v e a d o p t e d 'prospective.' " T h e r e must be l i t e r a l l y t e n s o f t h o u s a n d s o f e x i s t i n g l e a s e s w i t h s i m i l a r ' c o n s e n t ' p r o v i s i o n s as to s u b l e t t i n g as t h o s e i n t h i s c a s e . L a w y e r s and judges s h o u l d have a r i g h t to rely on existing w e l l - s e t t l e d p r o p e r t y law i n t e r p r e t a t i o n s by our 6

1071465 c o u r t s . S e e my s p e c i a l c o n c u r r e n c e 289 A l a . 5 1 8 , 5 2 4 , 268 S o . 2 d 792 i n Nunn v . K e i t h , (1972).

"As M r . J u s t i c e A l m o n p o i n t s o u t i n h i s d i s s e n t , i n q u o t i n g f r o m Mr. J u s t i c e B o u l d i n ' s o p i n i o n i n F a u c e t t , s u p r a , p a r t i e s have a r i g h t t o c o n t r a c t as t h e y see f i t so l o n g as t h e i r c o n t r a c t s a r e n o t v i o l a t i v e o f t h e law, and I would add, o r a g a i n s t public policy. Here, the parties made their c o n t r a c t ; t h e y o u g h t t o be b o u n d b y i t . I w o u l d a d d that I concur i n the other views expressed i n J u s t i c e Almon's d i s s e n t . "
4

350

So. 2d a t 1039. Looking to the special Court concurrence here i n Homa-Goff, t h e interpreted Justice

Eleventh Beatty's whom

Circuit special

of Appeals

concurrence wrote

t o mean

that

"the justices f o r a commercial clauses

Justice

Beatty standard

believed to

that

reasonableness where

applied

lease

approval

the parties

had not 'bargained disapprove]

to give the lessor [the commercial then

power t o a r b i t r a r i l y standards.'" looked 535

without regard to Court

F.3d a t

1 2 9 8 . The

of Appeals

to the reasoning

of the dissenting

Justices,

stating:

"The d i s s e n t i n g justices maintained t h a t Alabama c o u r t s had never read a commercial reasonableness s t a n d a r d i n t o s u b l e a s e a p p r o v a l c l a u s e s . B u i l d i n g on I n h i s d i s s e n t , J u s t i c e Almon e x p r e s s e d h i s o p i n i o n t h a t t h e r e a r e many r e a s o n s a l a n d l o r d may p r e v e n t subletting w i t h o u t e x p r e s s consent and t h a t t h e m a j o r i t y o p i n i o n e n l a r g e s the e s t a t e conveyed by the l e a s i n g of the p r o p e r t y f o r years b y r e m o v i n g t h e r e s t r i c t i o n p l a c e d on t h e l e s s e e .
4

1071465 t h a t theme, the d i s s e n t i n g j u s t i c e s a l s o w r o t e t h a t p a r t i e s c o u l d c o n t r a c t t o any s t a n d a r d t h e y w i s h e d to govern a l a n d l o r d ' s r e f u s a l to grant consent to a p r o p o s e d s u b l e a s e o r a s s i g n m e n t , [350 So. 2d] at 1 0 3 9 - 4 0 , 1041 ('the d i s s e n t i n g o p i n i o n s ' ) . "We c o n c l u d e t h a t seven j u s t i c e s i n Homa-Goff -the j u s t i c e s of the Beatty and dissenting o p i n i o n s -- a g r e e d t h a t p a r t i e s a r e f r e e t o c o n t r a c t to whatever standard they please to govern a landlord's withholding of consent to a proposed s u b l e a s e or a s s i g n m e n t . In the p r e s e n t c a s e , u n l i k e i n Homa-Goff, the p a r t i e s appear to have c o n t r a c t e d f o r a s t a n d a r d by w h i c h a p p r o v a l t o s u b l e a s e should be j u d g e d -- t h e ' s o l e d i s c r e t i o n ' s t a n d a r d . So t h e q u e s t i o n becomes, what does ' s o l e d i s c r e t i o n ' mean?" 535 F.3d at 1298-99. In f a c t , the question b e c o m e s , "What d o e s Succinctly means by an an
5

' s o l e d i s c r e t i o n ' mean u n d e r A l a b a m a l a w ? " under Alabama of law a "sole It discretion" is not

stated, absolute implied because

reservation covenant an of

right. and

mitigated

good f a i t h

fair of

dealing

in contracts

unqualified reservation

a r i g h t i n the

sole d i s c r e t i o n

" ' " ' T h e r e i s an i m p l i e d c o v e n a n t t h a t n e i t h e r p a r t y s h a l l do anything which w i l l have the e f f e c t of d e s t r o y i n g or i n j u r i n g the r i g h t s of the other p a r t y to r e c e i v e the fruits o f t h e c o n t r a c t ; ... i n e v e r y c o n t r a c t t h e r e e x i s t s an i m p l i e d c o v e n a n t o f g o o d f a i t h and f a i r d e a l i n g . ' " ' ( q u o t i n g S e l l e r s v. H e a d , 261 A l a . 2 1 2 , 73 So. 2d 7 4 7 , 751 ( 1 9 5 4 ) ) [ ] . See also Restatement (Second) of Contracts 205 (1981) ('Every c o n t r a c t i m p o s e s upon e a c h p a r t y a d u t y o f good f a i t h and fair d e a l i n g i n i t s p e r f o r m a n c e and i t s e n f o r c e m e n t . ' ) . " H u n t e r v. Wilshire Credit Corp., 927 So. 2d 810, 813 n.5 (Ala. 2 0 0 5 ) ( q u o t i n g L l o y d N o l a n F o u n d . , I n c . v. C i t y o f F a i r f i e l d H e a l t h c a r e A u t h . , 837 So. 2d 2 5 3 , 267 (Ala. 2002)).
5

1071465 of one of the p a r t i e s t o be to a contract expresses the intent of

the p a r t i e s any such

s u b j e c t to terms t h a t covenant.

are i n c o n s i s t e n t

with

implied

In C h r y s l e r C a p i t a l (11th C i r . 1991), Circuit

C o r p . v. L a v e n d e r ,

934

F.2d

290,

293

the U n i t e d S t a t e s Court recognized a

of Appeals

f o r the

Eleventh

commercial-reasonableness court's holding a sublease was law,

s t a n d a r d when i t a f f i r m e d t h e f e d e r a l d i s t r i c t that Chrysler Capital's refusal to agree to

u n r e a s o n a b l e . The 'a l a n d l o r d may consent to a

Court of Appeals wrote:

"Under Alabama

n o t u n r e a s o n a b l y and c a p r i c i o u s l y w i t h h o l d h i s sublease agreement. The landlord's rejection commercial 2d 1035,

s h o u l d be j u d g e d u n d e r a t e s t a p p l y i n g a r e a s o n a b l e standard.' 1038 jury Homa-Goff The Interiors issue F.2d v. Cowden, 350 So.

( A l a . 1977).

of commercial 293. We

reasonableness i s a Chrysler from will that be

q u e s t i o n . " 934 to that the a

at that

disagree with be inferred

Capital opinion applied or in not

extent

i t may

commercial-reasonableness

standard

to a l l r e j e c t i o n s the right to r e j e c t .

of a s s i g n e e s or s u b l e s s e e s whether has been r e s e r v e d to the landlord

his sole The

discretion

Eleventh Circuit

Court of Appeals concluded here

that

1071465 seven J u s t i c e s i n Homa-Goff to whatever "agreed that p a r t i e s are free to to govern a or

contract landlord's

standard of consent at 1298.

they

please

withholding 535 F.3d

to a proposed We, in with accord

sublease with

assignment." Justices the

seven

i n Homa-Goff of contract parties

and i n a c c o r d expressed are free

the endorsement of 1901, 2 2 , contract

6

liberty

i n A l a . Const. negotiate a

confirm

that

to

to

whatever standard arm's by the be length

they please,

p a r t i c u l a r l y where t h e r e lease or

i s an

negotiation

of a commercial

assignment persuasive

commercial e n t i t i e s . holding no

I n s u c h a s i t u a t i o n we f i n d of Georgia that

o f t h e Supreme C o u r t of an implied has give

" [ t ] h e r e can where of a

breach to a

covenant what the

of good the

faith

party

contract

done him

provisions to do."

the

contract Sprinkler S.E.2d "'an

expressly

right

Automatic

Corp. o f A m e r i c a v. A n d e r s o n , 284 (1979). That court

243 Ga. 8 6 7 , 8 6 8 , 257 stating that

283,

continued,

absolute

right

or p r i v i l e g e regardless

... c a n b e e x e r c i s e d of the motive f o r so

without doing.'" v.

incurring

liability

243 Ga. a t 8 6 8 - 6 9 , 257 S . E . 2 d a t 2 8 4 - 8 5

(quoting

Schaeffer

S e c t i o n 22 p r o v i d e s : " T h a t no e x p o s t f a c t o l a w , n o r a n y law, i m p a i r i n g the o b l i g a t i o n s of c o n t r a c t s ... s h a l l be p a s s e d by t h e l e g i s l a t u r e "

6

10

1071465 King, 223 Ga. 468, 470, 155 S.E.2d 815, 816 (1967)).

Furthermore, t h i s Court to contract

has c o n s i s t e n t l y h e l d t h a t t h e freedom liberty interest.

i s an i n v i o l a t e

"In Ex p a r t e Rhodes (Rhodes v . M c W i l s o n ) , [202 Ala. 6 8 , 79 S o . 462 ( 1 9 1 8 ) ] , i t was o b s e r v e d : 'When the people of this state, through their representatives, met i n c o n v e n t i o n t o form this s t a t e government, they r e s e r v e d t o themselves and their descendants and s u c c e s s o r s certain rights, l i b e r t i e s , p r i v i l e g e s , and i m m u n i t i e s , which they did n o t s u r r e n d e r o r cede t o t h e g o v e r n m e n t t o be created by the convention. They also exacted g u a r a n t i e s o f t h e government so formed t o p r o t e c t each p e r s o n i n t h e s t a t e , and secure t o him the enjoyment and e x e r c i s e o f these r i g h t s , liberties, privileges, and i m m u n i t i e s , so r e s e r v e d against encroachment or destruction thereof by other persons, whether m a j o r i t i e s or m i n o r i t i e s of the whole, or officers of any department of the government itself. Some, b u t n o t a l l , o f these r i g h t s , l i b e r t i e s , p r i v i l e g e s , and i m m u n i t i e s , a r e enumerated i n the B i l l of R i g h t s , which comprises t h e f i r s t 36 s e c t i o n s o f o u r C o n s t i t u t i o n . T h a t a l l t h i s i s t r u e i s obvious from a r e a d i n g of the l a s t two s e c t i o n s o f t h e B i l l o f R i g h t s , a s f o l l o w s : "'"Sec. 35. That t h e s o l e o b j e c t and o n l y l e g i t i m a t e end o f government i s t o p r o t e c t the c i t i z e n i n the enjoyment of l i f e , l i b e r t y , a n d p r o p e r t y , a n d when t h e government assumes o t h e r f u n c t i o n s i t i s u s u r p a t i o n and o p p r e s s i o n . " ' " S e c . 36. That t h i s e n u m e r a t i o n o f c e r t a i n r i g h t s s h a l l not i m p a i r o r deny others r e t a i n e d by t h e people; and, t o guard against any encroachments on t h e r i g h t s h e r e i n r e t a i n e d , we d e c l a r e that everything i n this d e c l a r a t i o n of rights i s 11

1071465 excepted out of the general powers o f government, and shall forever remain i n v i o l a t e . " ' 202 A l a . 6 8 , 6 9 , 79 S o . 4 6 2 , 463, 1 A.L.R. 568.

" I n M e y e r v . S t a t e o f N e b r a s k a , [ 2 62 U.S. 390 (1923)], t h e Supreme C o u r t o f t h e U n i t e d States, t r e a t i n g what i s embraced i n t h e t e r m ' l i b e r t y ' as guaranteed by t h e C o n s t i t u t i o n , observed: 'While this court has not attempted to define with e x a c t n e s s t h e l i b e r t y thus g u a r a n t e e d , t h e term has r e c e i v e d much c o n s i d e r a t i o n a n d some o f t h e i n c l u d e d t h i n g s have been d e f i n i t e l y s t a t e d . W i t h o u t doubt, i t denotes not merely freedom from b o d i l y r e s t r a i n t but a l s o the r i g h t of the i n d i v i d u a l to c o n t r a c t
' "

City 68

o f M o b i l e v . R o u s e , 2 3 3 A l a . 6 2 2 , 6 2 4 , 173 S o . 2 6 6 , 2 6 7 added). 1901, quoted of Rights but above, the

( 1 9 3 7 ) ( f i n a l emphasis As stated

i n 36, A l a . C o n s t . i n Alabama's B i l l by the people,

r i g h t s enumerated rights retained

are not the only in this

"everything the general

declaration government 1901, 36.

of r i g h t s i s excepted from and s h a l l forever remain

powers o f

inviolate."

A l a . Const.

The b a n o n i m p a i r i n g t h e o b l i g a t i o n s o f c o n t r a c t s 1901, 22, i s obviously one that

provided

i n A l a . Const.

s h a l l f o r e v e r remain i n v i o l a t e . Alabama caselaw has m a i n t a i n e d the constitutional prohibition on impairing contracts by

c o n s i s t e n t l y upholding the intent of the contracting p a r t i e s . 12

1071465 "Under general Alabama rules of contract interpretation, the intent of the contracting p a r t i e s i s d i s c e r n e d from the whole of the c o n t r a c t . See Loerch v. National Bank of Commerce of B i r m i n g h a m , 624 S o . 2 d 5 5 2 , 553 ( A l a . 1 9 9 3 ) . W h e r e there i s no i n d i c a t i o n that the terms of the c o n t r a c t are used i n a s p e c i a l or t e c h n i c a l sense, they will be g i v e n their ordinary, plain, and n a t u r a l m e a n i n g . S e e E x p a r t e Dan T u c k e r A u t o S a l e s , I n c . , 718 S o . 2 d 3 3 , 36 ( A l a . 1 9 9 8 ) . I f t h e c o u r t determines that the terms are unambiguous ( s u s c e p t i b l e o f o n l y one r e a s o n a b l e meaning), then the c o u r t w i l l presume t h a t t h e p a r t i e s intended what t h e y s t a t e d and w i l l e n f o r c e t h e c o n t r a c t as w r i t t e n . See i d . a t 36; V o y a g e r L i f e I n s . Co. v . W h i t s o n , 703 S o . 2 d 9 4 4 , 948 ( A l a . 1 9 9 7 ) . " Homes o f L e g e n d , I n c . v . M c C o l l o u g h , 776 S o . 2 d 7 4 1 , 746 ( A l a . 2000). " S i m i l a r l y , i n Summers v . Adams M o t o r C o . , 34 Ala. A p p . 3 1 9 , 39 S o . 2 d 300 ( 1 9 4 9 ) , the Court of Appeals upheld a liquidated-damages p r o v i s i o n of a c o n t r a c t f o r t h e s a l e o f an a u t o m o b i l e . S u m m e r s , t h e purchaser, had agreed not t o r e s e l l the c a r w i t h i n s i x months w i t h o u t f i r s t o f f e r i n g to r e s e l l i t to Adams M o t o r C o m p a n y f o r i t s r e a s o n a b l e m a r k e t v a l u e . The c o u r t s t a t e d : " ' B e f o r e t h e c o n t r a c t was e x e c u t e d t h e M o t o r C o m p a n y was n o t o b l i g a t e d t o s e l l o r d e l i v e r t h e a u t o m o b i l e t h a t was s o l d t o M r s . Summers e x c e p t on t e r m s a g r e e a b l e t o the dealer. Neither was Mrs. Summers o b l i g a t e d t o purchase that automobile from t h e M o t o r Company e x c e p t on t e r m s a g r e e a b l e to h e r . I t would be an unwarranted interference with their l i b e r t y of contract for t h i s court to say that they could not e n t e r i n t o t h e a g r e e m e n t t h a t was e n t e r e d into ' 13

1071465 "34 A l a . A p p . a t 3 2 3 , 39 S o . 2 d a t 3 0 3 . " State v. Lupo, 984 S o . 2 d 3 9 5 , 410 ( A l a . 2007 ) ( P a r k e r , J . ,

concurring The v. Adams

specially). quoted i n the special writing i n Lupo, Summers (1949),

case Motor

C o . , 34 A l a . A p p . 3 1 9 , 39 S o . 2 d 300 provision

involved sale World

a liquidated-damages automobile. I I , there to f i l l

i n a contract f o r the immediately of new following automobiles returning

o f an War

In the years was a shortage

available

t h e i n c r e a s e d demand c r e a t e d b y that those most i n need the cars the a

servicemen. afforded

To e n s u r e

o f a c a r were would n o t be in for for

priority resold

delivery for a buyer agree

and t h a t fast who in

immediately Summers

profit, expressed

dealership real in need return

asked

each to

transportation priority for car,

writing

that,

i n delivery,

the purchaser

would

not r e s e l l

the car the fair

at least i t would

s i x months, first

o r i f i t was n e c e s s a r y

to sell at

be o f f e r e d

the to the dealership

m a r k e t v a l u e . The v o l u n t a r y c o n t r a c t p r o v i d e d f o r l i q u i d a t e d damages o f $250 i f the purchaser breached. Summers breached

the agreement, and t h e Court o f A p p e a l s favor to the dealership. There

a f f i r m e d a judgment i n

t h e p a r t i e s h a d e n t e r e d i n t o an

14

1071465 unambiguous contract that required consideration from the

p u r c h a s e r i n two p a r t s : the commitment to

o n e p a r t was t h e money p a i d , the dealer resold. the The right

the other of of first

provide

refusal stated:

i f t h e c a r was "We

t o be

Court

Appeals into

are dealing with

an A l a b a m a

contract

entered

b y two c o m p e t e n t c o n t r a c t i n g p a r t i e s i n t h i s mindful upon So. of our duty to avoid,

State,

a n d we a r e infringing

i f at a l l possible,

the rights 2d a t 304. Therefore,

of e i t h e r

or both."

34 A l a . A p p . a t 3 2 4 , 39

we

maintain

our

long-held

position

that

contract, Where

under Alabama parties with to

law, should a contract

be c o n s t r u e d use

as w r i t t e n . that i s the

the

language

inconsistent terms of

a commercial-reasonableness will n o t be altered an

standard, by an

such

contract faith.

implied express as

covenant standard written.

o f good

Therefore,

unqualified

such as " s o l e d i s c r e t i o n " i s a l s o "'[W]here the language

t o be c o n s t r u e d

i s unambiguous,

a n d b u t one i t must t o make

reasonable

construction

of the contract

i s possible,

b e e x p o u n d e d a s made, a s t h e c o u r t s new c o n t r a c t s

are not at l i b e r t y

f o r t h e p a r t i e s . ' " H e i n r i c h v . G l o b e Indem. Co., (1964) (quoting New

276 A l a . 5 1 8 , 5 2 3 , 164 S o . 2 d 7 0 9 , 7 1 3 - 1 4

15

1071465 York 547, Life 550 I n s . Co. v . T o r r a n c e , (1932) (emphasis 224 A l a . 6 1 4 , 6 1 7 , 141 S o .

added)). Conclusion

A consent

contract t o an sole

provision assignee's

allowing proposed

an

assignor

to withhold at the

further

sublease,

assignor's

discretion,

i s not subject to a

commercialCourt

reasonableness by the

s t a n d a r d . The q u e s t i o n c e r t i f i e d Court of Appeals

to this

the Eleventh C i r c u i t negative. QUESTION ANSWERED.

i s thus

answered i n

Cobb, C . J . , and L y o n s , W o o d a l l , Shaw, J J . , c o n c u r . Murdock, J . , concurs i n the

Stuart,

Smith, B o l i n ,

and

result.

16