South Highland Limited Partnership v. Southern Family Markets of Clanton, LLC

Annotate this Case

Download PDF

REL: 12/17/10 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, 2010-2011 2090614 South Highland L i m i t e d P a r t n e r s h i p v. Southern Family Markets o f Clanton, LLC Appeal from J e f f e r s o n C i r c u i t Court (CV-07-902373) BRYAN, J u d g e . South appeals Highland f r o m a summary Markets o f Clanton, On Limited October Partnership ("the l a n d l o r d " ) judgment i n f a v o r o f S o u t h e r n Family L L C ("the t e n a n t " ) . We a f f i r m . 27, 2007, the landlord sued the tenant, 2090614 stating a claim that October 3 1 , 1987 the t e n a n t had breached ("the 1987 l e a s e " ) . 1 a lease The l a n d l o r d dated alleged t h a t , i n t h e 1987 l e a s e , J o s e p h S. B r u n o a n d T h e r e s a L. B r u n o had leased a building leased premises") i n a s h o p p i n g c e n t e r i n C l a n t o n ("the to Bruno's, Inc. ("Bruno's"), f o r the o p e r a t i o n o f a Food F a i r g r o c e r y s t o r e ; t h a t t h e l a n d l o r d had s u c c e e d e d t o t h e i n t e r e s t s o f J o s e p h S. B r u n o a n d T h e r e s a L. Bruno i n the interest 1987 lease; i n the lease that Bruno's had assigned i t s t o t h e t e n a n t i n 2005; and t h a t , i n 2006, t h e t e n a n t h a d b r e a c h e d t h e 1987 l e a s e by v a c a t i n g t h e l e a s e d p r e m i s e s a n d c e a s i n g t o p a y r e n t a n d o t h e r c h a r g e s due under t h e 1987 l e a s e . Answering, 1987 lease. the tenant denied that Thereafter, i t had breached the i t moved f o r a summary j u d g m e n t . I n support of i t s motion, the tenant argued t h a t the p r i m a r y term The landlord also sued Bruno's Supermarkets, I n c . " S u p e r m a r k e t s , I n c . " ) , as s u c c e s s o r o f B r u n o ' s , I n c . , s t a t i n g c l a i m t h a t S u p e r m a r k e t s , I n c . was a l s o l i a b l e f o r t h e a n t ' s b r e a c h o f t h e 1987 l e a s e . However, S u p e r m a r k e t s , I n c . had been succeeded by Bruno's Supermarkets, LLC ( " S u p e r m a r k e t s , L L C " ) , a n d t h e l a n d l o r d amended i t s c o m p l a i n t t o s u b s t i t u t e S u p e r m a r k e t s , LLC as a d e f e n d a n t i n p l a c e o f S u p e r m a r k e t s , I n c . T h e r e a f t e r , S u p e r m a r k e t s , LLC f i l e d a C h a p t e r 11 b a n k r u p t c y p e t i t i o n , a n d t h e t r i a l c o u r t d i s m i s s e d the landlord's claim against Supermarkets, LLC w i t h o u t prejudice. 1 2 2090614 of the had 1987 not l e a s e had expired e x e r c i s e d the extend i t s term B r u n o ' s was tenant to e x e r c i s e m a i l e i g h t months b e f o r e 1987 that l e a s e on May the Over" 1987 lease that provided agreement said, i t i n the that option lease e x p i r i n g on 1987 by 1987 Bruno's to May 31, lease provided sending the e x e r c i s i n g i t s o p t i o n by that landlord certified the e x p i r a t i o n of the p r i m a r y term of 31, 2003, and contained that, a B r u n o ' s had provision " [ i ] n the absence the so remain Tenant of "Holding any as a should so; written the i t shall i f titled done occupancy of the demised premises a f t e r the e x p i r a t i o n of month" and contrary, not in term, the the 2003; t h a t remain lease to 31, five-year period w r i t t e n n o t i c e t h a t i t was the May option granted for a 2008, b e c a u s e , t h e on tenant from to t h a t Bruno's h o l d i n g over a f t e r the e x p i r a t i o n of primary term of the 1987 lease had b e e n on month b a s i s p u r s u a n t t o t h a t p r o v i s i o n o f t h e 1987 Bruno's assignment of i t s tenant month i n t e r e s t i n the i n 2005 c o n s t i t u t e d t h e 1987 a month-to- lease; lease to that the assignment of i t s i n t e r e s t i n a m o n t h - t o - m o n t h t e n a n c y ; and t h a t t h e t e n a n t had n o t b r e a c h e d t h e 1987 l e a s e i n 2006 when i t v a c a t e d ceased paying the r e n t and other 3 the l e a s e d premises c h a r g e s due under the and 1987 2090614 l e a s e b e c a u s e i t h a d g i v e n t h e l a n d l o r d t h e n o t i c e r e q u i r e d by t h e 1987 l e a s e t o t e r m i n a t e i t s m o n t h - t o - m o n t h t e n a n c y b e f o r e vacating t h e l e a s e d p r e m i s e s and c e a s i n g o t h e r c h a r g e s due u n d e r t h e 1987 Opposing t o pay the r e n t and lease. the tenant's motion, the l a n d l o r d argued that t h e t e n a n t was n o t e n t i t l e d t o a summary j u d g m e n t b e c a u s e , t h e landlord said, regarding whether Bruno's had e x e r c i s e d the 1987 because the genuine l e a s e u n t i l May t h e 1987 1987 Landlord the a lease lease "may issue of material 31, 2 0 0 8 . The stated fact i t s option existed to extend l a n d l o r d argued t h a t Bruno's option that, to extend be e x e r c i s e d by t h e T e n a n t g i v i n g t o t h e a notice i n w r i t i n g at least eight e x p i r a t i o n o f the then current term" (8) months b e f o r e (emphasis added), r a t h e r t h a n s t a t i n g t h a t i t must be e x e r c i s e d i n t h a t manner, a genuine issue of material fact existed regarding whether B r u n o ' s h a d e x e r c i s e d i t s o p t i o n t o e x t e n d t h a t 1987 lease i n ways o t h e r t h a n by a w r i t t e n n o t i c e s e n t by c e r t i f i e d mail. The l a n d l o r d f u r t h e r a r g u e d t h a t t e s t i m o n y by i t s a g e n t Scott Stanford established a genuine issue of material regarding w h e t h e r B r u n o ' s , t h r o u g h i t s a g e n t , M a r k James, had e x e r c i s e d t h e o p t i o n o r a l l y i n a m e e t i n g between 4 Stanford fact and 2090614 James i n A p r i l 2 0 0 2 . The l a n d l o r d a l s o a r g u e d t h a t Stanford's t e s t i m o n y and an i n t e r n a l B r u n o ' s e - m a i l t h a t h a d b e e n s e n t t o the landlord by facsimile transmission in July e s t a b l i s h e d a genuine i s s u e o f m a t e r i a l f a c t regarding Bruno's had e x e r c i s e d i t s option sending a the l a n d l o r d copy remained i n possession expiration continued o f the primary of that internal o f the leased term e-mail. by The Bruno's premises a f t e r the o f t h e 1987 lease and had t o p a y r e n t i n t h e amount o f $4.75 p e r s q u a r e f o o t , t h e same r e n t i t h a d p a i d b e f o r e the e x p i r a t i o n o f the primary t e r m o f t h e 1987 l e a s e , e s t a b l i s h e d t h e e x i s t e n c e issue whether t o e x t e n d t h e 1987 l e a s e l a n d l o r d a l s o argued that evidence e s t a b l i s h i n g that had 2002 of material fact regarding constituted an i m p l i e d e x e r c i s e 1987 by lease whether of i t s option Bruno's. F i n a l l y , the l a n d l o r d o f a genuine that conduct to extend the argued that evidence e s t a b l i s h i n g t h a t a t t o r n e y s r e p r e s e n t i n g Bruno's w i t h respect lease t o Bruno's assignment to the tenant Estoppel Certificate" had o f i t s i n t e r e s t i n t h e 1987 sent a document titled t o t h e l a n d l o r d f o r i t t o s i g n i n 2005 e s t a b l i s h e d a genuine i s s u e o f m a t e r i a l f a c t regarding Bruno's had e x e r c i s e d "Landlord i t s option 5 t o e x t e n d t h e 1987 whether lease. 2090614 W i t h r e s p e c t t o h i s o r a l d i s c u s s i o n w i t h James i n A p r i l 2002, S t a n f o r d testified: "[THE TENANT'S COUNSEL] Q. Okay. So you met, t a l k e d a b o u t an e x t e n s i o n i n A p r i l o f 2002 w i t h M a r k James, right? "A. Y e s . "Q D u r i n g t h a t m e e t i n g i n A p r i l o f 2002 w i t h M a r k James, d i d he e x t e n d o r a t t e m p t t o e x t e n d t h e l e a s e t e r m s on b e h a l f o f B r u n o ' s , I n c . ? "A. Y e s . "Q. So, i t ' s y o u r p o s i t i o n h e r e t o d a y t h a t i n t h a t m e e t i n g i n A p r i l o f 2002, B r u n o ' s , I n c . , t h r o u g h i t s r e p r e s e n t a t i v e Mark James, a g r e e d t o e x t e n d t h e o r i g i n a l term of the l e a s e ; i s t h a t f a i r ? "A. Y e s , as I r e c a l l . "Q. Now, as I'm a s k i n g you t h e s e q u e s t i o n s a b o u t t h e A p r i l f a c e - t o - f a c e m e e t i n g w i t h Mark James, I know you a r e r e f e r r i n g t o some n o t e s t o h e l p r e f r e s h y o u r memory, r i g h t ? "A C o r r e c t . "Q. And I ' v e a c t u a l l y g o t a c o p y o f t h o s e n o t e s . And I'm g o i n g t o mark them as E x h i b i t Number 12 t o y o u r deposition. "(Defendant's Exhibit No. marked f o r i d e n t i f i c a t i o n ) . 12 was "And I ' v e a s k e d you w h e t h e r o r n o t Mark James, as t h e r e p r e s e n t a t i v e f r o m B r u n o ' s , I n c . , a g r e e d t o e x t e n d on b e h a l f o f B r u n o ' s , I n c . , t h e i r t e r m d u r i n g t h a t A p r i l 2002 m e e t i n g and you t o l d me t h a t he d i d , right? 6 2090614 "A. Right. "Q. Now, you l o o k e d a t your notes before you a n s w e r e d t h a t q u e s t i o n . What p a r t o f y o u r n o t e s h e r e t h a t I have g o t now a t t a c h e d as E x h i b i t 12 "A. The t h i r d b u l l e t point. "Q. Okay. And t h a t b u l l e t p o i n t I'm g o i n g t o r e a d i t i n t o t h e r e c o r d . And i f I r e a d i t w r o n g , you c a n t e l l me, o k a y ? " I t s a y s , 'Met w i t h Mark on 4-23-02. P e r Mark, t h e y p l a n on r e n e w i n g , no e x p a n s i o n , w i l l u p g r a d e t o a Food World. L a n d l o r d t o upgrade t h e e n t i r e c e n t e r a t t h a t t i m e . R e n t t o r e m a i n a t $4.75 p e r s q u a r e f o o t , a n d t h e y w o u l d l i k e us t o p u r s u e o b t a i n i n g a t r a f f i c l i g h t w i t h a l l p a r t i e s c o n t r i b u t i n g t o the c o s t . ' T h a t ' s what t h a t s a y s ? "A. Correct. "Q. T e l l me a l i t t l e b i t more a b o u t what you remember f r o m t h i s A p r i l 2002 f a c e - t o - f a c e m e e t i n g , and p a r t i c u l a r l y what Mark James a n d y o u , as a r e p r e s e n t a t i v e from South Highland, d i s c u s s e d . "A. I r e a l l y d o n ' t r e c a l l . I t i n v o l v e d d i s c u s s i n g where we were w i t h [James's p r e d e c e s s o r ] , where t h e process was, j u s t g e n e r a l i n t r o d u c t i o n a n d t h e n d i s c u s s i n g f u r t h e r , y o u know, r e a c h i n g a c o n c l u s i o n on what t h e y w o u l d be w i l l i n g t o do. "Q Now, i t s a y s h e r e on y o u r n o t e s , r e n e w i n g . ' You s e e t h a t , r i g h t ? "A. Uh-huh. "Q. And t h e y , "A. 'They p l a n I assume, i s B r u n o ' s , I n c . , r i g h t . Correct. 7 on 2090614 "Q So, p e r y o u r n o t e s h e r e t h a t we've a t t a c h e d as E x h i b i t Number 12, i t seems as i f B r u n o ' s , I n c . , was p l a n n i n g on r e n e w i n g , r i g h t ? "A. Yes. "Q. Okay, and, i n f a c t , B r u n o ' s , I n c . , c o m m u n i c a t e d t o you i n t h i s f a c e - t o - f a c e m e e t i n g i n A p r i l o f 2002 t h a t i t was p l a n n i n g t o renew, r i g h t ? "A Right. II "Q D i d Mark James a t t h e A p r i l 2002 m e e t i n g s i g n any document on b e h a l f Inc.? "A. face-to-face of Bruno's, No. "Q. A t t h e A p r i l 2002 f a c e - t o - f a c e m e e t i n g w i t h Mark James as a r e p r e s e n t a t i v e f o r B r u n o ' s , I n c . , d i d he provide t o you, as a representative f o r [the landlord], anything i n w r i t i n g regarding Bruno's p l a n to extend the lease? "A. No. "Q. I n o t h e r w o r d s , he j u s t t o l d you ... a t t h a t m e e t i n g t h a t B r u n o ' s , I n c . , was p l a n n i n g t o renew o r extend t h e i r lease, r i g h t ? "A. (Emphasis Correct." added.) Stanford t e s t i f i e d that, after h i s discussion with in April 2002, he h a d s e n t 2, 2002. The June James e - m a i l s on June 12, 2002, e - m a i l 8 stated: 12 and James July 2090614 " H e r e ' s a summary o f o u r r e c e n t r e g a r d i n g the l e a s e renewal i n C l a n t o n , discussions AL. "CVS has r e c e n t l y r e n e w e d t h e i r l e a s e f o r t h e same l o c a t i o n i n t h e c e n t e r . We a r e t a l k i n g t o them a b o u t s l i d i n g down t o t h e end cap, w h i c h w o u l d g i v e them a d r i v e - t h r u . I t w o u l d be v e r y h e l p f u l t o t h i s p r o c e s s t o a l r e a d y have a r e n e w a l i n p l a c e f o r F o o d F a i r / F o o d W o r l d . 9/30/02 i s t h e r e q u i r e d d a t e t o o f f i c i a l l y n o t i f y us o f y o u r i n t e n t t o renew. We w o u l d a s k you t o c o n s i d e r s i g n i n g t h e 5 - y e a r r e n e w a l as soon as p o s s i b l e . "At t h e t i m e o f y o u r u p g r a d e t o F o o d W o r l d , we w i l l commit t o u p g r a d i n g t h e c e n t e r i n a l l ways you have r e q u e s t e d : " f r e s h coat of p a i n t across "upgrade p a r k i n g the front lot lighting " p a i n t i n g main s i g n out front " n o t e t h a t t h e p a r k i n g l o t was r e d o n e i n 2000, i n c l u d i n g r e p a i r o f a l l b a s e - f a i l e d a r e a s , a new b i n d e r c o a t o f a s p h a l t and restriping. " E i t h e r a t t h e same t i m e as t h e u p g r a d e o r i n t h e months f o l l o w i n g , we a r e p l a n n i n g on p u t t i n g on a new roof. We are considering a sprayed p o l y u r e t h a n e foam r o o f s y s t e m . A c c o r d i n g t o F r a n k Welch at P e r i m e t e r R o o f i n g , a B a l d w i n County study showed t h i s r o o f s y s t e m g e n e r a t e d 25% r e d u c t i o n i n energy c o s t s . " F o r t h e p a s t y e a r , we have been i n t h e p r o c e s s of o b t a i n i n g a p p r o v a l of a t r a f f i c l i g h t a t the i n t e r s e c t i o n i n f r o n t o f t h e c e n t e r . We have s e c u r e d a C i t y Council Resolution that states t h e i r approval and w i l l i n g n e s s to cover a l l maintenance and u t i l i t i e s a s s o c i a t e d w i t h t h e l i g h t . The [ D e p a r t m e n t 9 2090614 of T r a n s p o r t a t i o n ] has p r e l i m i n a r i l y approved the p r o j e c t , but w i l l not give f i n a l approval u n t i l a s i t e p l a n a n d i n s t a l l a t i o n s p e c s have been r e v i e w e d . " I n e x c h a n g e f o r t h e above c o n t r i b u t i o n s t o t h e c e n t e r , we n e e d an i n c r e a s e i n t h e b a s e r e n t f o r t h e n e x t f i v e y e a r s . F o r t h e p a s t 15 y e a r s , B r u n o ' s has e n j o y e d a f l a t r a t e o f $4.75 p e r s q u a r e f o o t . The percentage rent p r o v i s i o n i n the lease i s i r r e l e v a n t due to extremely high sales breakpoint f o r t h i s m a r k e t . We n e e d f o r t h e b a s e r e n t t o be i n c r e a s e d t o $5.50 f o r t h e r e n e w a l p e r i o d . " L e t me know i f you have any q u e s t i o n s . We a r e e x c i t e d about t h e f u t u r e o f [the] c e n t e r and l o o k f o r w a r d t o moving ahead w i t h t h e p r o j e c t . " (Emphasis added.) The J u l y 2, 2002, e - m a i l stated: " I w a n t e d t o c o n f i r m o u r d i s c u s s i o n l a s t week a b o u t C l a n t o n . P l e a s e r e p l y b a c k t o t h i s a n d l e t me know i f i t a g r e e s w i t h y o u r u n d e r s t a n d i n g o f b o t h o u r commitments. "1) B r u n o ' s w i l l Food W o r l d d u r i n g convert 2002. t h e Food Fair to a "2) R e n t a l r a t e w i l l i n c r e a s e t o $5 p e r s q u a r e f o o t b e g i n n i n g 8/1/02. "3) 5 - y e a r r e n e w a l o p t i o n h a s b e e n e l e c t e d f o r t h e p e r i o d June 1, 2003 t o May 3 1 , 2008. "4) Three 5-year renewal o p t i o n s remain. "5) B r u n o ' s w i l l r e i m b u r s e [ l a n d l o r d ] f o r onet h i r d of the cost f o r the i n s t a l l a t i o n of the traffic l i g h t . I f the estimate of o n e - t h i r d e x c e e d s $15,000, t h e n Bruno's r e s e r v e s the right to reconsider before a n y work i s 10 2090614 performed. "6) [ L a n d l o r d ] w i l l p a i n t f r o n t f a c a d e , u p g r a d e p a r k i n g l o t l i g h t i n g , and p a i n t m a i n s i g n o u t front. "Feel free to c a l l Stanford t e s t i f i e d me t h a t he d i d not r e c e i v e an immediate r e s p o n s e t o h i s June 12 and J u l y 2, 2002, e - m a i l s ; h o w e v e r , he testified t h a t sometime a f t e r by facsimile transmission James had counsel, sent and to a Mike another J u l y 17, 2002, he received internal e-mail copy of a an Conley, Bruno's agent of Bruno's assistant on July ("James's J u l y 17 i n t e r n a l e - m a i l " ) . James's J u l y 17 e-mail general 17, 2002 internal stated: "We have r e a c h e d an a g r e e m e n t w i t h t h e L a n d l o r d of [the Food F a i r s t o r e i n C l a n t o n ] f o r a Lease E x t e n s i o n A g r e e m e n t a l o n g t h e f o l l o w i n g t e r m s and conditions: "A) The L e a s e w i l l be e x t e n d e d u n t i l May 31, 2008. C u r r e n t e x p i r a t i o n i s 5/31/03. Three f i v e - y e a r options w i l l remain. "B) R e n t w i l l i n c r e a s e t o $ 1 5 9 , 0 0 0 / a n n u a l l y ($5 [per square foot]) upon e x e c u t i o n of the A g r e e m e n t . C u r r e n t r e n t i s $151,050 ($4.75 [per square f o o t ] ) . "C) P r i o r t o 12/31/02, L a n d l o r d w i l l (1) r e r o o f the Food F a i r f a c i l i t y ; (2) p a i n t the f a c a d e o f t h e s h o p p i n g c e n t e r ; (3) u p g r a d e t h e parking l o t lighting; (4) p a i n t t h e s h o p p i n g 11 that 2090614 center pylon sign. "D) Upon i n s t a l l a t i o n o f a t r a f f i c s i g n a l i n front the shopping center, Bruno's will reimburse Landlord 1/3 of the c o s t of the s i g n a l , n o t t o e x c e e d $15,000. "E) P r i o r t o J a n u a r y 31, 2003, B r u n o ' s commence w i t h t h e r e - f o r m a t t i n g [ o f ] t h e F a i r to a Food World. will Food " P l e a s e p r o v i d e the Lease E x t e n s i o n Agreement a t y o u r c o n v e n i e n c e . L e t me know i f you have any questions or i f I can provide any additional information." Regarding James's July 17 internal e-mail, Stanford testified: "[THE TENANT'S COUNSEL] Q. And i n [James's J u l y 17 i n t e r n a l ] e - m a i l h e r e i t s a y s , 'We have r e a c h e d an a g r e e m e n t w i t h t h e l a n d l o r d o f t h e above r e f e r e n c e d s t o r e f o r a l e a s e e x t e n s i o n agreement a l o n g the f o l l o w i n g t e r m s and c o n d i t i o n s . ' You see that, right? "A. Uh-huh. "Q. And t h e n i t goes I n c . , b e l i e v e d t o be right? "A. on t o s e t o u t what B r u n o ' s , the terms of the e x t e n s i o n , Right. "Q. And you u n d e r s t o o d , as a r e p r e s e n t a t i v e o f [ t h e landlord], when you received [James's July 17 i n t e r n a l ] e - m a i l t h a t t h i s was B r u n o ' s u n d e r s t a n d i n g of the terms of the e x t e n s i o n , r i g h t ? "A. Yes. 12 2090614 "Q. And i f you compare D e f e n d a n t ' s E x h i b i t Number 15, w h i c h i s [ S t a n f o r d ' s J u l y 2 e - m a i l t o J a m e s ] , s e t t i n g out the terms of the p o t e n t i a l e x t e n s i o n , t o Exhibit Number 16, which i s [James's July 17 i n t e r n a l e - m a i l ] t h a t you r e c e i v e d by f a x f r o m B r u n o ' s , you know t h a t t h e s e a r e two different terms? "A. Yeah, t h e y a s p e c t s , yeah. are slightly different in certain "Q. W e l l , f o r i n s t a n c e , i n y o u r p r o p o s a l t o B r u n o ' s , I n c . , w h i c h i s E x h i b i t Number 15, you have i n c l u d e d a t c l a u s e f i v e a s t a t e m e n t t h a t s a y s , 'Bruno's w i l l reimburse [ l a n d l o r d ] f o r o n e - t h i r d of the c o s t f o r the installation of the t r a f f i c light. I f the e s t i m a t e o f o n e - t h i r d e x c e e d s $15,000, t h e n B r u n o ' s r e s e r v e s t h e r i g h t t o r e c o n s i d e r b e f o r e any work i s performed.' "And t h a t was p a r t o f y o u r p r o p o s a l Inc., r i g h t ? "A. to Bruno's, Right. "Q. B u t what you a c t u a l l y g o t i n t u r n f r o m B r u n o ' s , I n c . , i n t h i s e - m a i l t h a t was o r i g i n a l l y d r a f t e d by Mark James a t B r u n o ' s , I n c . , i s , ' P r i o r t o December 31, 2002 l a n d l o r d w i l l one, r e r o o f t h e F o o d F a i r f a c i l i t y ; two, p a i n t t h e f a c a d e o f t h e s h o p p i n g c e n t e r ; t h r e e , upgrade the p a r k i n g l o t l i g h t i n g ; f o u r , p a i n t the shopping center pylon s i g n , ' r i g h t ? "A. No. A c t u a l l y t h e i t e m t h a t y o u ' r e w o u l d be i t e m D, 'Upon i n s t a l l a t i o n s i g n a l i n f r o n t of the shopping center reimburse l a n d l o r d o n e - t h i r d of the s i g n a l , n o t t o e x c e e d $15,000.' comparing to of a t r a f f i c Bruno's w i l l cost of the " I t l o o k s l i k e t h e o n l y t h i n g t h a t was l e f t o u t was i f t h e work e x c e e d e d $15,000 t h a t t h e y r e s e r v e d the r i g h t . 13 2090614 "Q. Okay. So, i t l o o k s l i k e a c t u a l l y -- a n d I a p o l o g i z e . You d e f i n i t e l y know b e t t e r a b o u t t h e s e documents t h a n me. "But i t l o o k s l i k e t h e c l a u s e D o f [James's J u l y 17 i n t e r n a l e - m a i l ] i s a c t u a l l y i n r e s p o n s e t o y o u r c l a u s e f i v e from [ S t a n f o r d ' s J u l y 2 e - m a i l ] , r i g h t ? "A. C o r r e c t . "Q. And you w o u l d a g r e e w i t h me, as a r e p r e s e n t a t i v e o f [ t h e l a n d l o r d ] , t h a t t h o s e two c l a u s e s do d i f f e r , right? "A. And t h e one you r e a d , I t e m C, a c t u a l l y l i k e i t c o r r e s p o n d s more t o number 6. looks "Q. Okay. And i n l o o k i n g a t I t e m C i n [James's J u l y 17 i n t e r n a l e - m a i l ] a n d c o m p a r i n g t h a t t o i t e m s i x i n [ S t a n f o r d ' s J u l y 2 e - m a i l ] , we u n d e r s t a n d t h a t Bruno's, I n c . , has a c t u a l l y imposed a d i f f e r e n t term w i t h r e g a r d t o t h e i m p r o v e m e n t s t h a n you p r o p o s e d t o them, r i g h t ? "A. R i g h t . And t h a t was r e a l l y where t h i s -- as f a r as i t g o t b e f o r e , you know -- t h e y were i m p o s i n g t h a t we do a l l o f o u r work b e f o r e t h e e n d o f '02. And we were w a n t i n g t o do i t a t t h e same t i m e . B e c a u s e we d i d n ' t want them t o d e l a y d o i n g an u p g r a d e t o a F o o d W o r l d f o r two y e a r s , y o u know. "Q. I understand. "A. We were w i l l i n g t o do t h a t , b u t we w a n t e d them t o do t h e i r p a r t . And one t h i n g I w o u l d n o t e , you see t h e two c h e c k m a r k s n e x t t o A a n d B? "Q. I do. "A. Those were on t h e e - m a i l t h a t came i n d i c a t i n g t h a t o u r a s s u m p t i o n was t h o s e were what we h a d a g r e e d t o . And t h e o t h e r i t e m s were s t i l l y e t t o b e , 14 2090614 you know still n e g o t i a t i n g was still g o i n g on. "Q. B u t y o u , as a r e p r e s e n t a t i v e o f [ t h e l a n d l o r d ] , u n d e r s t o o d t h a t B r u n o ' s , I n c . , was intending to r e q u i r e [the l a n d l o r d ] t o address what's s e t out of I t e m C o f [James's J u l y 17 i n t e r n a l e - m a i l ] b e f o r e they would a c t u a l l y f o r m a l l y agree t o extend, r i g h t ? "A. W e l l , a g a i n , i t was more o f t h e b u n d l e o f you know, i t e m s h e r e . You know, we f e l t l i k e we h a d an a g r e e m e n t t h a t we w o u l d do t h e s e i m p r o v e m e n t s that t h e y l i s t e d . And we d i d n ' t have any i s s u e s w i t h t h o s e , t h a t l i s t c o r r e s p o n d i n g t o our l i s t . But, a g a i n , we w a n t e d them t o go t o t h e F o o d W o r l d . They w e r e n ' t w i l l i n g [ t o ] go, you know, t o go t h e r e . in "And s o , y e s , f r o m t h e i r p e r s p e c t i v e , we from a g r e e m e n t on t h o s e i s s u e s , y e s . weren't "Q. So, you w e r e n ' t i n a g r e e m e n t on t h e i m p r o v e m e n t s by t h e t e r m s p r o p o s e d by B r u n o ' s , I n c . , c o r r e c t ? "A. Right, right. "Q. I n o t h e r w o r d s , [ t h e l a n d l o r d ] d i d n o t a g r e e t o make t h e i m p r o v e m e n t s p e r t h e t e r m s p r o p o s e d by Bruno's, Inc., r i g h t ? "A. Right. "Q. The "A. The timing. Yeah. t i m i n g o f them a t l e a s t , right? "Q. So, t h e r e was no m e e t i n g o f t h e m i n d s b e t w e e n B r u n o ' s , I n c . , and [ t h e l a n d l o r d ] r e g a r d i n g a t l e a s t t h e t i m i n g o f t h e i m p r o v e m e n t s r e q u i r e d by B r u n o ' s , Inc., r i g h t ? "A. Yes, not i n w r i t i n g . I t had not occurred. "Q. W e l l , what w r i t i n g you d i d a c t u a l l y g e t p r o p o s e d 15 2090614 s o m e t h i n g d i f f e r e n t t h a n what y o u h a d p r o p o s e d t o Bruno's, I n c . , r i g h t ? "A. Y e s . A n d my u n d e r s t a n d i n g was t h a t what I p r o p o s e d was a r e f l e c t i o n o f what Mark James a n d I h a d a g r e e d t o . What came b a c k was t h e y w a n t e d us t o do o u r p a r t e a r l i e r . "Q. B u t i t d i d a c t u a l l y come b a c k f r o m B r u n o ' s , I n c . , t h a t t h e y wanted something d i f f e r e n t t h a n you remembered, r i g h t ? "A. R i g h t . "Q. A n d y o u knew, as a r e p r e s e n t a t i v e o f [ t h e l a n d l o r d ] , t h a t B r u n o ' s , I n c . , i n f a c t , d i d want s o m e t h i n g d i f f e r e n t t h a n y o u remembered, r i g h t ? "A. Y e s . As t o t i m i n g , right. "Q. D i d [ t h e l a n d l o r d ] e v e r a g r e e t o a t l e a s t t h e t i m i n g o f t h e improvements proposed by Bruno's, Inc.? "A. No." (Emphasis added.) Stanford sent Stanford "First draft testified an e - m a i l Amendment on S e p t e m b e r 16, 2002, C o n l e y and a d r a f t t o Lease." of the F i r s t Stanford that, o f a document titled Regarding that e-mail and t h e Amendment t o L e a s e that accompanied i t , testified: "[THE TENANT'S COUNSEL] Q. I'm g o i n g t o mark as D e f e n d a n t ' s E x h i b i t 17 what a p p e a r s t o be a f a x f r o m B r u n o ' s t o y o u , Mr. S t a n f o r d , as a r e p r e s e n t a t i v e o f [ t h e l a n d l o r d ] . A n d t h e r e i s a b u n d l e o f documents 16 2090614 t h a t a r e a t t a c h e d t o t h e f a x . And I would a s k you t o t a k e a l o o k a t t h o s e f o r me. "(Defendant's Exhibit No. marked f o r i d e n t i f i c a t i o n ) . 17 was "A. Okay. "Q. Do y o u r e c a l l h a v i n g r e c e i v e d t h i s f a x f r o m M i k e Conley a t Bruno's, Inc.? "A. Y e s . "Q. And y o u u n d e r s t o o d t h a t as p a r t o f t h i s f a x Bruno's, I n c . , was p r o p o s i n g an a c t u a l written amendment t o t h e l e a s e , r i g h t ? "A. R i g h t . occur. Which i s what we were thinking would "Q. R i g h t . A n d , i n f a c t , B r u n o ' s , I n c . , b y t h e words and t e r m s o f t h i s p r o p o s e d amendment, h a d i n c l u d e d some d e t a i l a b o u t t h e i m p r o v e m e n t s i t w a n t e d a t t h e property, right? "A. C o r r e c t . "Q. D i d y o u h a v e an o p p o r t u n i t y p r o p o s e d terms o f t h e e x t e n s i o n ? to review these "A. Y e s . "Q. A r e t h e s e y o u r document? notes here h a n d w r i t t e n on this you were r e v i e w i n g this "A. Y e s , I b e l i e v e s o . "Q. Okay. What i s i t t h a t document t o d e t e r m i n e ? "A. I f t h e amendment p r o p o s e d was a c c e p t a b l e t o [ t h e landlord]. 17 2090614 "Q. Was i t a c c e p t a b l e t o [the l a n d l o r d ] ? "A. No. "Q. And, i n f a c t , as a r e s u l t [ t h e l a n d l o r d ] agreed t o these proposed terms, r i g h t ? never "A. W e l l , t h e r e were c e r t a i n o f t h e t e r m s t h a t we d i d n o t a g r e e t o . W h i c h , a g a i n , we t a l k e d a b o u t p r i m a r i l y was t h e t i m i n g o f t h e u p g r a d e a n d t h e t i m i n g of our improvements. "Q. D i d B r u n o ' s , II n c . , e v e r e x e c u t e i n w r i t i n g t h i s nc., amendment t o t h e l e a s e ? "A. No, n o t t o my knowledge. "Q. A g a i n , you u n d e r s t o o d , as a r e p r e s e n t a t i v e o f [the l a n d l o r d ] , i n r e c e i v i n g t h i s f a x and t h e d r a f t o f t h e f i r s t amendment t o t h e l e a s e t h a t B r u n o ' s , Inc., a t l e a s t w a n t e d t o have i n w r i t i n g t h e , e x t e n s i o n o f t h i s l e a s e , r i ^gV h 4- ? tO "A. W e l l , no. I knew t h a t t h e y w a n t e d t o m e m o r i a l i z e a c c u r a t e l y a l l o f the improvements t h a t they wanted us t o do a n d t h a t t h e y were a g r e e i n g t o do, a n d t h e r e n t i n c r e a s e and t h e t r a f f i c l i g h t . "Q. I n f a c t , t h e y w a n t e d t h o s e i m p r o v e m e n t s as p a r t of t h e i r i n t e n t t o e x e r c i s e t h e i r r i g h t t o extend the l e a s e ? "A. W e l l , a g a i n , t h a t ' s t h e d i s p u t e , I g u e s s . You know, t h e y w e r e , you know, p u t t i n g t h o s e i t e m s i n t o an amendment, w h i c h we t h i n k i s t h e p r o p e r f o r m , a n d knew t h a t h a d t o h a p p e n . B u t I t h i n k t h e i s s u e i s j u s t a pure e x t e n s i o n of the o l d lease versus c h a n g i n g t h e o l d l e a s e by t h e t h i n g s i n this amendment. You know, t h a t i s t h e d i s t i n c t i o n t h a t I t h i n k we're on d i f f e r e n t s i d e s o f . "Q. Okay, So, you're calling 18 an extension, as a 2090614 r e p r e s e n t a t i v e o f [ t h e l a n d l o r d ] , an e x t e n s i o n o f the l e a s e a c c o r d i n g t o the o r i g i n a l terms of the lease, right? "A. Yes, I believe so. "Q. I n o t h e r w o r d s , B r u n o ' s , I n c . , i s l e a s i n g t h i s property. And by extending i t , i s agreeing to c o n t i n u e t o s t a y and pay r e n t a c c o r d i n g t o t h e same t e r m s t h a t i t had always been a t e n a n t at the Clanton property, r i g h t ? "A. Yeah. "Q. B u t what y o u ' r e t e l l i n g me now i s , you, as a r e p r e s e n t a t i v e of [the l a n d l o r d ] , u n d e r s t o o d t h a t t h e w o r d ' r e n e w a l ' meant s o m e t h i n g d i f f e r e n t , and what you t h o u g h t r e n e w a l meant was t h a t t h e r e w o u l d be a change i n t h e t e r m s o f t h e l e a s e ? "A. I wouldn't go there. I think the word ' e x t e n s i o n ' and ' r e n e w a l , I t h i n k t h a t p r o b a b l y i s i n t e r c h a n g e a b l e . And, you know, t h e y have n o t b e e n u s e d c o n s i s t e n t l y . B u t I t h i n k t h e y ' r e t h e same thing. "Q. W e l l , l e t ' s go b a c k t o e-mail]. "A. [James's J u l y 17 internal Okay. "Q. And l o o k w i t h me t o t h e v e r y t o p o f t h a t e - m a i l w h i c h , a g a i n , i s an i n t e r n a l e - m a i l f r o m Mark James to Mike Conley at Bruno's, r i g h t ? "A. Right. "Q. And, in fact, what t h i s e-mail that was forwarded to you as a representative of [the l a n d l o r d ] s a y s i s t h a t t h i s document i s r e f e r e n c i n g a l e a s e e x t e n s i o n agreement, r i g h t ? 19 2090614 "A. Uh-huh. "Q. And you c a n s e e t h a t f r o m r e a d i n g t h i s e - m a i l -¬ "A. Right. "Q. -- t h a t ' s p a r t o f y o u r d e p o s i t i o n as E x h i b i t 16, right? "A. Right. "Q. So, i n r e a d i n g t h a t , as a r e p r e s e n t a t i v e o f [ t h e landlord], you u n d e r s t a n d t h a t B r u n o ' s b e l i e v e s these a r e the terms o f the a c t u a l e x t e n s i o n ? "A. W e l l , "Q. you know -- Right? "A. Mark James i n s i d e counsel w h i c h we t h i n k l i k e you j u s t know what t h a t wrote t h i s . And i t l o o k s l i k e t h e i r p u t i t i n t h e f o r m o f an amendment, i s t h e p r o p e r f o r m . He r e f e r s t o i t p o i n t e d o u t . B u t , you know, I d o n ' t n e c e s s a r i l y means. "Q. W e l l , t o me i t means t h a t you e - m a i l from Bruno's, I n c . , r i g h t ? "A. received this Right. "Q. And i n r e a d i n g t h i s e - m a i l , you know t h a t Mark James a t B r u n o ' s , I n c . , b e l i e v e s t h e s e t e r m s t o be p a r t o f an a c t u a l e x t e n s i o n , r i g h t ? I mean, t h a t ' s what he s a i d ? "A. He h a d i t a l l b u n d l e d t o g e t h e r , right. "Q. are I mean, t h a t ' s what t h i s document s a y s , the terms o f the e x t e n s i o n , ' r i g h t ? "A. Uh-huh. 20 'These 2090614 "Q. And so by r e a d i n g t h a t as t h e [landlord's] r e p r e s e n t a t i v e , you know t h a t Mark James a t B r u n o ' s , Inc., who i s your primary contact at Bruno's, b e l i e v e s t h e s e are the terms of the extension, right? "A. Right. And "Q. that T h e r e i s no -- confusion on that. "[THE LANDLORD'S COUNSEL]: W e l l , you've i n t e r r u p t e d him and I o b j e c t t o t h a t . L e t ' s r e a d i t a l l b a c k . "[THE TENANT'S COUNSEL]: Read what a l l b a c k ? "[THE LANDLORD'S COUNSEL]: He was right in the m i d d l e o f a n s w e r i n g and you jumped on h i s a n s w e r . I w o u l d l i k e t o r e a d b a c k t h e l a s t q u e s t i o n and have him a n s w e r . "(RECORD READ). "Q. Is there "A. I'm again? s o m e t h i n g e l s e you want t o add not sure. Do you want t o a s k me the to that? question "Q. I d o n ' t . I have a l r e a d y g o t t e n y o u r a n s w e r . I think [the l a n d l o r d ' s counsel] t h o u g h t you had something e l s e to say. "A. I g u e s s -- I t h i n k t h e o n l y t h i n g I was a b o u t t o s a y was t h a t we were a s k i n g , you know, f o r M i k e t o h u s t l e up, l e t ' s g e t t h i s done. A g a i n , we were t r y i n g t o use t h a t n o t i c e d a t e t o g e t them t o g e t i t done. "Q. And t h e n o t i c e d a t e y o u ' r e t a l k i n g a b o u t i s e i g h t months "A. Right. 21 the 2090614 "Q. that pre-date "A. -¬ Right. "Q. -- t h e e x p i r a t i o n o f lease, right? the primary term of the "A. T h a t ' s c o r r e c t . "Q. And t h a t i s p e r t h e t e r m s o f t h e o r i g i n a l as r e l a t e d t o t h e e x t e n s i o n . lease "A. Y e s , I t h i n k s o . "Q. it in the W e l l , we can l o o k b a c k a t t h e document. B u t what s a y s i s , t h a t t h e t e n a n t -- i t may p r o v i d e n o t i c e w r i t i n g e i g h t months p r i o r t o t h e e x p i r a t i o n o f p r i m a r y term, r i g h t ? "A. Y e s . "Q. And so t h a t ' s c o n t e m p l a t i n g to the extension, r i g h t ? a deadline relating "A. Y e s . And o u r u n d e r s t a n d i n g was t h a t t h i s was s u p p l i e d t o us t o show us t h a t a n d t o s u p p l y t h a t w r i t t e n requirement from t h e i r p e r s p e c t i v e . "Q. I understand. "A. Now, a g a i n , we f e l t l i k e t h e e x t e n s i o n , p u r e , s i m p l e , v a n i l l a e x t e n s i o n , we h a d b e e n r e l y i n g on t h a t f o r months. "Q. And, a g a i n , t h a t was a v e r b a l r e l i a n c e , c o r r e c t ? "A. And we h a d a l l o f t h e s e b u n d l e o f i s s u e s t h a t we were t r y i n g t o a c c o m p l i s h , you know, and we w a n t e d t o , you know, g e t i t done. "(BREAK TAKEN). 22 2090614 "Q. (By [ t h e t e n a n t ' s c o u n s e l ) B e f o r e t h e quick b r e a k , I was a s k i n g you a q u e s t i o n a b o u t E x h i b i t Number 17, w h i c h was a f a x I b e l i e v e you r e c e i v e d from Bruno's, Inc., c o r r e c t ? "A. Correct. "Q. And i t i s a c t u a l l y a p r o p o s e d f i r s t amendment t o the l e a s e , r i g h t ? "A. Correct. "Q. And t h e r e i s an e x h i b i t t h a t i s a t t a c h e d t o t h i s f i r s t amendment t o t h e l e a s e t h a t i s E x h i b i t A. Do you see t h a t ? "A. Yes. "Q. And in this exhibit, i t a p p e a r s as though B r u n o ' s , I n c . , i s p r o p o s i n g t o have S o u t h H i g h l a n d , as t h e l a n d l o r d , c o m p l e t e t h e f o l l o w i n g i m p r o v e m e n t s p r i o r t o December 31, 2002; i s t h a t r i g h t ? "A. Yes. "Q. And t h e r e a r e s e v e r a l t h i n g s l i s t e d h e r e one t h r o u g h f i v e . B u t i n summary, i t ' s r e p l a c i n g t h e r o o f , p a i n t i n g the shopping c e n t e r facade, upgrading the shopping center l o t l i g h t i n g , repairing and r e p a i n t the shopping center l o t l i g h t p o l e s , and p a t c h i n g a l l p o t h o l e s and r e s t r i p i n g t h e p a r k i n g lot, right? "A. Right. "Q. D i d [ t h e l a n d l o r d ] , i n f a c t , a d d r e s s t h e s e p r i o r t o December 31, 2002? items "A. No. Now, t h e r e may have b e e n some t h i n g s r e l a t e d t o t h e n o r m a l r e p a i r s and m a i n t e n a n c e i n t h e l e a s e not improved l i k e they are c o n t e m p l a t i n g . I know t h e s e b i g i t e m s -23 2090614 "Q. I t ' s [ t h e l a n d l o r d ' s ] p o s i t i o n t h a t t h e y d i d n ' t i n t e n d t o comply w i t h t h e terms p r o p o s e d here by Bruno's, I n c . , r i g h t ? "A. Right." ( E m p h a s i s added.) Stanford testified that, in April 2003, Steve Taylor, Bruno's d i r e c t o r o f r e a l e s t a t e , had i n d i c a t e d t o S t a n f o r d i n a telephone conversation had t h a t i t was B r u n o ' s p o s i t i o n t h a t i t n o t e x e r c i s e d i t s o p t i o n t o e x t e n d t h e 1987 l e a s e b e c a u s e i t had not sent exercising letter t h e l a n d l o r d w r i t t e n n o t i c e t h a t B r u n o ' s was i t s option. in April In response, Stanford sent 2003. I n p e r t i n e n t p a r t , t h a t l e t t e r Taylor stated: "Under t h e [1987] l e a s e , t h e b a s e t e r m e x p i r e s May 3 1 , 2003 a n d [ B r u n o ' s ] h a d f o u r (4) f i v e - y e a r r e n e w a l o p t i o n s . To e x e r c i s e t h e r e n e w a l option u n d e r t h e [1987] l e a s e , [ B r u n o ' s ] must n o t i f y t h e l a n d l o r d i n w r i t i n g a t l e a s t e i g h t months b e f o r e t h e e x p i r a t i o n o f t h e [1987] l e a s e . T h i s was done i n J u l y o f 2002 b y f a x . A t t h a t t i m e , B r u n o ' s r e q u e s t e d a d d i t i o n a l i m p r o v e m e n t s t o be made b y t h e l a n d l o r d i n c o n j u n c t i o n w i t h an u p g r a d e f r o m a F o o d F a i r t o a F o o d W o r l d . M i k e C o n l e y p r e p a r e d an amendment t o t h e l e a s e t o i n c o r p o r a t e a l l c h a n g e s t o t h e [1987] l e a s e a g r e e d t o by b o t h p a r t i e s . A t t h i s p o i n t , t h e l e a s e was r e n e w e d a n d t h e amendment was i n p r o c e s s . " F o r t h e p a s t n i n e months, we have a c t e d a n d r e l i e d on t h i s r e n e w a l . R e c e n t c o n v e r s a t i o n s have i n d i c a t e d t h e need t o c l a r i f y t h e terms o f t h e l e a s e renewal. " L e a s e e x t e n d e d t o May 3 1 , 2008. 24 a 2090614 "Rent w i l l ($5/sf]. increase to $159,000 per year "Upon i n s t a l l a t i o n o f a t r a f f i c s i g n a l i n f r o n t of the shopping c e n t e r , Bruno's w i l l reimburse Landlord o n e - t h i r d of the cost, not to exceed $15,000. " A l t h o u g h b o t h p a r t i e s a g r e e d t o make t h e improvements f o r t h e Food W o r l d upgrade, t h e t i m i n g of t h o s e improvements i s s t i l l under d i s c u s s i o n c a u s i n g t h e amendment t o r e m a i n i n d r a f t f o r m . "We w o u l d l i k e t o g e t r e a c h an agreement r e g a r d i n g t h e t i m i n g o f t h e i m p r o v e m e n t s as soon as p o s s i b l e . P l e a s e c a l l me t o d i s c u s s . " ( E m p h a s i s added.) On June 5, 2003, C o n l e y s e n t S t a n f o r d a l e t t e r r e s p o n d i n g to Stanford's letter April 17, 2003, letter to Taylor. Conley's stated: "Your l e t t e r d a t e d A p r i l 21, 2003 a d d r e s s e d t o Mr. S t e v e T a y l o r w i t h a c o p y t o t h e u n d e r s i g n e d has b e e n r e v i e w e d and d i s c u s s e d by t h e management o f Bruno's. In your l e t t e r , i t was asserted that '[Bruno's] exercised the first option before September 30, 2002 by f a x . ' P l e a s e know t h a t B r u n o ' s r e s p e c t f u l l y d i s a g r e e s w i t h y o u r a s s e r t i o n as i t i s t h e p o s i t i o n o f B r u n o ' s t h a t t h e f a x you have r e f e r r e d t o was an i n t e r n a l memorandum f r o m Mr. James t o t h e u n d e r s i g n e d s e t t i n g out r e c e n t l y n e g o t i a t e d a d d i t i o n a l t e r m s and c o n d i t i o n s t o be i n s e r t e d i n a l e a s e amendment. As s u c h , t h e f a x was n o t an e x e r c i s e o f an o p t i o n p r i v i l e g e u n d e r t h e t e r m s and c o n d i t i o n s o f t h e [1987] L e a s e . A t t h e p r e s e n t , Bruno's b e l i e v e s t h a t [the 'Hold Over' p r o v i s i o n ] o f t h e [1987] L e a s e g o v e r n s . 25 2090614 " I w o u l d ask t h a t you c o n t a c t Mr. S t e v e T a y l o r i n o r d e r t o d e t e r m i n e how [ t h e l a n d l o r d ] and B r u n o ' s m i g h t move f o r w a r d i n resolving a l l outstanding i s s u e s . P l e a s e know t h a t n o t h i n g h e r e i n m i g h t be deemed o r c o n s t r u e d as a w a i v e r o f t h e r i g h t s and r e m e d i e s a v a i l a b l e t o B r u n o ' s u n d e r t h e t e r m s and c o n d i t i o n s o f t h e [1987] L e a s e a t l a w and i n e q u i t y . T h i s i s an o f f e r o f c o m p r o m i s e . " Stanford primary testified that, t e r m o f t h e 1987 i n the the the e x p i r a t i o n of l e a s e , Bruno's continued amount o f $4.75 p e r paid before after square f o o t , the e x p i r a t i o n of the primary t o pay the rent same r e n t i t had term of the 1987 l e a s e . S t a n f o r d t e s t i f i e d t h a t , i n O c t o b e r 2003, t h e l a n d l o r d began seeking another entity because Bruno's would not o p t i o n t o e x t e n d t h e 1987 successful premises. in finding to confirm the leased t h a t i t had premises exercised i t s l e a s e ; h o w e v e r , t h e l a n d l o r d was another Stanford t e s t i f i e d l e a r n e d t h a t B r u n o ' s was lease entity to t h a t , i n May going lease the not leased 2005, t h e l a n d l o r d to assign i t s i n t e r e s t i n the 1987 l e a s e to the tenant. S t a n f o r d t e s t i f i e d t h a t the l a n d l o r d did not know w h e t h e r B r u n o ' s had "Holding "[THE was telling the e x e r c i s e d i t s o p t i o n to extend the t h a t i t s t e n a n c y had the Bruno's tenant 1987 become a m o n t h - t o - m o n t h one Over" p r o v i s i o n . S t a n f o r d f u r t h e r TENANT'S COUNSEL] Q. 26 B a s e d on that that lease or pursuant to testified: knowledge 2090614 t h a t i t was p o s s i b l e t h a t [ t h e t e n a n t ] w o u l d h a v e assumed t h i s l e a s e f r o m B r u n o ' s was a month t o month, what d i d [ t h e l a n d l o r d ] do t o make s u r e o r a t least t r y and c o m m u n i c a t e t h a t [the l a n d l o r d ] b e l i e v e d t h e l e a s e was f o r a t e r m l o n g e r t h a n t h a t ? "A. W e l l , a g a i n , t h i s i s f r o m memory h e r e . B u t as I r e c a l l , we d i d n ' t know what [ t h e t e n a n t ] u n d e r s t o o d a b o u t t h e l e a s e . A g a i n , we w o u l d i m a g i n e i t was w h a t e v e r [ B r u n o ' s ] r e p r e s e n t e d t o them. So, what we d i d n ' t want t o do i f , i n f a c t , t h e y b e l i e v e d i t was a f i v e - y e a r r e n e w a l , we d i d n ' t want t o c a l l them and s a y , h e y , c a n you c o n f i r m t h e f a c t o r do you t h i n k we a r e i n a month t o month? "We d i d n ' t want t o go t h e r e . So, we f e l t l i k e j u s t b e i n g s i l e n t was t h e way t o go. And as I a l l u d e d t o i n t h i s e - m a i l we j u s t d i s c u s s e d , E x h i b i t 28, that we were n o t s u r e i f t h e y w o u l d be i n t e r e s t e d i n an u p g r a d e p r o p o s a l . "Q. So, i n o t h e r w o r d s , [ t h e l a n d l o r d ] was o f t h e o p i n i o n t h a t i t was b e t t e r t o r e m a i n s i l e n t i n t h e hopes t h a t [the t e n a n t ] would s t a y i n t h e p r o p e r t y , w h e t h e r t h e y b e l i e v e d t h e l e a s e t o be month t o month o r i f t h e l e a s e was s e t t o e x p i r e i n 2008, r i g h t ? "A. Y e s . We d i d n ' t s e e t h e a d v a n t a g e o f r a i s i n g issue. that "Q. And, i n f a c t , i t was more a d v a n t a g e o u s t o [ t h e l a n d l o r d ] t o remain q u i e t and t o n o t a l e r t [the tenant] t o the f a c t t h a t [the l a n d l o r d ] b e l i e v e d t h a t t h e l e a s e was s e t t o e x p i r e i n 2008, r i g h t ? "A. Y e s . " Stanford received from testified a document attorneys that titled representing the "Landlord Bruno's 27 landlord subsequently Estoppel Certificate" with respect to the 2090614 a s s i g n m e n t o f i t s i n t e r e s t i n t h e 1987 l e a s e t o t h e t e n a n t . I n pertinent part, the Landlord Estoppel Certificate, which i s d r a f t e d as a c e r t i f i c a t i o n b y t h e l a n d l o r d r e g a r d i n g t h e 1987 l e a s e and i s a d d r e s s e d t o Bruno's, s t a t e d : "In order t o induce [the tenant] t o e n t e r i n t o c e r t a i n p u r c h a s e arrangements and l e a s e a s s i g n m e n t s with [Bruno's], Landlord hereby certifies as follows: II " ( c ) The t e r m o f t h e L e a s e commenced A p r i l 1, 1983 a n d t h e c u r r e n t t e r m o f t h e L e a s e i s s c h e d u l e d t o e x p i r e on May 3 1 , 2008. ... " "(n) The i n f o r m a t i o n h e r e i n s e t f o r t h h e r e i n [ s i c ] i s c o r r e c t , o r e x c e p t i o n s have b e e n m a r k e d a n d i n i t i a l e d . The c o n t e n t s o f t h i s c e r t i f i c a t e s h a l l be binding upon t h e p a r t y who executes i t . This c e r t i f i c a t e may be r e l i e d on b y t h e p e r s o n t o whom t h i s c e r t i f i c a t e i s addressed, by t h e assignee o r d e s i g n e e o f such p e r s o n , by [ B r u n o ' s ] , and by [the t e n a n t ] and i t s a f f i l i a t e s . " ( E m p h a s i s added.) The l a n d l o r d s i g n e d Certificate and r e t u r n e d the Landlord i t to the attorneys Estoppel representing Bruno's. Following a hearing judgment m o t i o n , t h e t r i a l regarding the court entered tenant's summary- a judgment g r a n t i n g t h e t e n a n t ' s summary-judgment m o t i o n . The l a n d l o r d t h e n t i m e l y 28 2090614 a p p e a l e d t o t h e supreme c o u r t , w h i c h t r a n s f e r r e d t h e a p p e a l t o this c o u r t p u r s u a n t t o § 1 2 - 2 - 7 ( 6 ) , A l a . Code 1975. " T h i s C o u r t ' s r e v i e w o f a summary j u d g m e n t i s de novo. W i l l i a m s v. S t a t e Farm Mut. A u t o . I n s . Co., 886 So. 2d 72, 74 ( A l a . 2 0 0 3 ) . We a p p l y t h e same s t a n d a r d o f r e v i e w as t h e t r i a l court applied. S p e c i f i c a l l y , we must d e t e r m i n e w h e t h e r t h e movant has made a p r i m a f a c i e s h o w i n g t h a t no g e n u i n e i s s u e o f m a t e r i a l f a c t e x i s t s and t h a t t h e movant i s e n t i t l e d t o a j u d g m e n t as a m a t t e r o f l a w . R u l e 5 6 ( c ) , A l a . R. C i v . P.; B l u e C r o s s & B l u e S h i e l d o f A l a b a m a v. H o d u r s k i , 899 So. 2d 949, 952-53 ( A l a . 2 0 0 4 ) . I n m a k i n g s u c h a d e t e r m i n a t i o n , we must r e v i e w t h e e v i d e n c e i n t h e l i g h t most f a v o r a b l e t o t h e nonmovant. W i l s o n v. Brown, 496 So. 2d 756, 758 ( A l a . 1986) . Once t h e movant makes a p r i m a f a c i e s h o w i n g t h a t t h e r e i s no g e n u i n e i s s u e o f m a t e r i a l f a c t , t h e b u r d e n t h e n s h i f t s t o t h e nonmovant t o p r o d u c e ' s u b s t a n t i a l e v i d e n c e ' as t o t h e e x i s t e n c e of a genuine issue of m a t e r i a l fact. Bass v. S o u t h T r u s t Bank o f B a l d w i n C o u n t y , 538 So. 2d 794, 797-98 ( A l a . 1 9 8 9 ) ; A l a . Code 1975, § 12-21-12. ' [ S ] u b s t a n t i a l evidence i s evidence of such weight and q u a l i t y t h a t f a i r - m i n d e d p e r s o n s i n t h e e x e r c i s e of i m p a r t i a l j u d g m e n t can r e a s o n a b l y i n f e r the e x i s t e n c e o f t h e f a c t s o u g h t t o be p r o v e d . ' West v. F o u n d e r s L i f e A s s u r . Co. o f F l a . , 547 So. 2d 870, 871 ( A l a . 1 9 8 9 ) . " Dow v. Alabama (Ala. Democratic Party, 897 So. 2d 1035, 1038-39 2004). On appeal, the landlord argues, as i t d i d before the trial court, that Stanford's testimony r e g a r d i n g h i s meeting with James material in April fact 2002 established r e g a r d i n g whether 29 James, a genuine acting on issue of b e h a l f of 2090614 Bruno's, orally l e a s e . We exercised f i n d no m e r i t Stanford's Bruno's o p t i o n to extend the i n t h a t argument. In p e r t i n e n t notes regarding 1987 part, that meeting s t a t e : "Met w i t h Mark on 4-23-02. P e r Mark, t h e y p l a n on r e n e w i n g , no e x p a n s i o n , w i l l u p g r a d e t o a F o o d World. L a n d l o r d t o upgrade the e n t i r e c e n t e r at t h a t t i m e . R e n t t o r e m a i n a t $4.75 p e r s q u a r e f o o t , and t h e y w o u l d l i k e us t o p u r s u e o b t a i n i n g a t r a f f i c l i g h t w i t h a l l p a r t i e s c o n t r i b u t i n g to the c o s t . " Those n o t e s i n d i c a t e t h a t James c o m m u n i c a t e d t o S t a n f o r d Bruno's planned certain conditions that the rent to exercise were met i t s option s u c h as the did not exercise corroborated which the option Stanford's stated he by that orally "9/30/02 conclusion April The court, s i g n i n g the landlord that also is the James's July genuine i s s u e of m a t e r i a l 17 as 23, required 5 - y e a r r e n e w a l as argues, agreeing James's J u l y 17 2002, is fact regarding date to w o u l d ask you soon as i t did internal i n t e r n a l e-mail 30 the t h a t James before e-mail possible." the trial established whether t h a t stated: a e-mail c o n s t i t u t e d Bruno's e x e r c i s e of i t s o p t i o n to extend the lease. i f 2002, e - m a i l t o James i n o f f i c i a l l y n o t i f y us o f y o u r i n t e n t t o renew. We to consider future s q u a r e f o o t and on June 12, the landlord's w o u l d r e m a i n a t $4.75 p e r p a r t i e s ' o b t a i n i n g a t r a f f i c l i g h t . The in that 1987 2090614 "We have r e a c h e d an a g r e e m e n t w i t h t h e L a n d l o r d of [the Food F a i r s t o r e i n Clanton] f o r a Lease E x t e n s i o n A g r e e m e n t a l o n g t h e f o l l o w i n g t e r m s and conditions: "A) The L e a s e w i l l be e x t e n d e d u n t i l May 31, 2008. C u r r e n t e x p i r a t i o n i s 5/31/03. Three f i v e - y e a r options w i l l remain. "B) R e n t w i l l i n c r e a s e t o $ 1 5 9 , 0 0 0 / a n n u a l l y ($5 [per square foot]) upon e x e c u t i o n of the A g r e e m e n t . C u r r e n t r e n t i s $151,050 ($4.75 [per square f o o t ] ) . "C) P r i o r t o 12/31/02, L a n d l o r d w i l l (1) r e r o o f the Food F a i r f a c i l i t y ; (2) p a i n t the f a c a d e o f t h e s h o p p i n g c e n t e r ; (3) u p g r a d e t h e parking l o t lighting; (4) p a i n t t h e s h o p p i n g center pylon sign. "D) Upon i n s t a l l a t i o n o f a t r a f f i c s i g n a l i n front the shopping center, Bruno's will reimburse Landlord 1/3 of the c o s t of the s i g n a l , n o t t o e x c e e d $15,000. "E) P r i o r t o J a n u a r y 31, 2003, B r u n o ' s commence w i t h t h e r e - f o r m a t t i n g [ o f ] t h e F a i r t o a Food World. will Food " P l e a s e p r o v i d e the Lease E x t e n s i o n Agreement a t y o u r c o n v e n i e n c e . L e t me know i f you have any questions or i f I can provide any additional information." James's J u l y 17 internal e-mail B r u n o ' s a g r e e m e n t t o e x t e n d t h e 1987 the will plainly l e a s e was indicates that conditioned l a n d l o r d ' s a g r e e m e n t t h a t " [ p ] r i o r t o 12/31/02, (1) r e - r o o f t h e F o o d F a i r f a c i l i t y ; 31 on Landlord (2) p a i n t t h e facade 2090614 of the shopping c e n t e r ; (4) paint the testified before shopping that the December 31, landlord's material (3) u p g r a d e t h e p a r k i n g center landlord pylon never argument t h a t fact regarding sign," agreed 2002. T h e r e f o r e , we lot lighting; and to Stanford do that f i n d no m e r i t i t established in the issue of internal e¬ a genuine w h e t h e r James's J u l y 17 work m a i l c o n s t i t u t e d Bruno's e x e r c i s e of i t s o p t i o n t o e x t e n d 1987 lease. Citing (1963), Mclntyre the v. Coker, l a n d l o r d argues, 274 as Ala. i t did 457, 150 i n the So. trial t h a t evidence e s t a b l i s h i n g t h a t Bruno's remained i n of the leased premises t e r m o f t h e 1987 o f $4.75 p e r a f t e r the l e a s e and e x p i r a t i o n of continued t o pay existence whether t h a t option to Coker, the 2d of a genuine i s s u e possession the primary r e n t i n t h e amount the 1987 supreme c o u r t lease stated lease, of m a t e r i a l c o n d u c t c o n s t i t u t e d an extend 1987 by fact regarding implied exercise Bruno's. the established of i t s In M c l n t y r e that "a l e s s e e who e n t e r s i n t o p o s s e s s i o n o f t h e d e m i s e d p r e m i s e s under a l e a s e f o r a f i x e d term, w i t h the p r i v i l e g e o f r e n e w i n g i t by g i v i n g w r i t t e n n o t i c e t o t h e l e s s o r , and c o n t i n u e s i n p o s s e s s i o n a f t e r the 32 220 court, s q u a r e f o o t , t h e same r e n t i t had p a i d b e f o r e e x p i r a t i o n of the p r i m a r y term of the the the v. 2090614 f i x e d t e r m has e x p i r e d , p a y i n g t h e r e n t t h e r e f o r as i t becomes due, t h e r e b y e l e c t s t o e x e r c i s e the o p t i o n f o r a r e n e w a l , a l t h o u g h no w r i t t e n n o t i c e was g i v e n . In such a l e a s e the requirement of a w r i t t e n n o t i c e may be w a i v e d by t h e p a r t i e s , and a w a i v e r may be i m p l i e d when t h e l e s s e e r e m a i n s i n p o s s e s s i o n and p a y s t h e r e n t t o t h e l e s s o r . " 274 A l a . a t 461, 150 So. 2d a t However, t h e o p i n i o n i n M c l n t y r e v. C o k e r does n o t r e f e r to a p r o v i s i o n i n the leases comparable The 224. at issue i n that case t h a t t o t h e " H o l d i n g O v e r " p r o v i s i o n i n t h e 1987 " H o l d i n g O v e r " p r o v i s i o n i n t h e 1987 lease was lease. stated: " I n t h e a b s e n c e o f any w r i t t e n a g r e e m e n t t o t h e c o n t r a r y , i f Tenant s h o u l d remain i n occupancy of the demised premises a f t e r the e x p i r a t i o n of the l e a s e t e r m , i t s h a l l so r e m a i n as a t e n a n t f r o m month t o month and a l l p r o v i s i o n s o f t h i s L e a s e a p p l i c a b l e t o such tenancy s h a l l remain i n f u l l f o r c e and e f f e c t . " Because of the p r e s e n c e o f the " H o l d i n g Over" p r o v i s i o n i n the 1987 l e a s e , we c o n c l u d e t h a t t h e f a c t s o f t h e c a s e now b e f o r e us a r e d i s t i n g u i s h a b l e f r o m t h e f a c t s i n M c l n t y r e v. C o k e r . conclude t h a t , because p r o v i s i o n i n t h e 1987 of the p r e s e n c e o f the " H o l d i n g Over" l e a s e , Bruno's remaining i n possession o f t h e l e a s e d p r e m i s e s a f t e r t h e e x p i r a t i o n o f t h e 1987 and i t s p a y i n g t h e same r e n t t e r m o f t h e 1987 lease We i t had p a i d d u r i n g the p r i m a r y d i d not e s t a b l i s h a genuine 33 lease issue of 2090614 material fact regarding whether t h a t conduct c o n s t i t u t e d i m p l i e d e x e r c i s e of i t s o p t i o n to extend the Finally, the landlord argues, c o u r t , t h a t the L a n d l o r d E s t o p p e l existence of a genuine w h e t h e r B r u n o ' s had lease. Although drafted u n t i l term of the the issue exercised of and material i t s option Landlord lease, i t did in lease. the trial C e r t i f i c a t e e s t a b l i s h e d the Estoppel 2005, w e l l a f t e r t h e 1987 as 1987 an fact regarding to extend the Certificate e x p i r a t i o n of the although i t does not 1987 was not primary purport to c o n t a i n a r e p r e s e n t a t i o n by B r u n o ' s , t h e l a n d l o r d a r g u e s t h a t Bruno's should be deemed to have adopted r e p r e s e n t a t i o n i n the L a n d l o r d E s t o p p e l current 2008" term of the by virtue 801(d)(2)(B) "(d) of the landlord's C e r t i f i c a t e that Lease i s scheduled to e x p i r e on May Rule Evid. 801(d)(2)(B), Ala. R. That Are Not Hearsay. A s t a t e m e n t i s n o t h e a r s a y i f -¬ II "(2) A d m i s s i o n s by P a r t y Opponent. The s t a t e m e n t is offered against a party and i s ... (B) a s t a t e m e n t o f w h i c h t h e p a r t y has manifested an a d o p t i o n or b e l i e f i n i t s t r u t h (Emphasis added.) 34 31, Rule provides: Statements "the 2090614 In the case now before i n d i c a t e s t h a t the L a n d l o r d by attorneys the record manifested current an 2008,'] o r b e l i e f any evidence Estoppel [of with 1987 the to that the that or gave used the tenant, Bruno's "has that 'the on May 31, r e c o r d does n o t Bruno's tenant to to the representation The drafted respect lease evidence evidence was Lease i s scheduled to e x p i r e establishing we any in i t s truth." Certificate Accordingly, contain adoption term of the i n the the Certificate Bruno's i t s interest does not although Estoppel representing assignment of us, contain the i t in Landlord any way. f i n d no m e r i t i n t h e l a n d l o r d ' s argument t h a t the L a n d l o r d E s t o p p e l of m a t e r i a l f a c t regarding o p t i o n to extend the Accordingly, C e r t i f i c a t e e s t a b l i s h e d a genuine i s s u e we 1987 w h e t h e r B r u n o ' s had exercised i t s lease. affirm the judgment of the trial court. AFFIRMED. Thompson, P . J . , and Pittman Moore, J . , c o n c u r s i n t h e 35 and Thomas, J J . , c o n c u r . result, without writing.

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.