385 So.3d 519
Ala.2023Background
- Lafayette Land Acquisitions II, LLC and Steven Walls executed a purchase agreement for Orange Beach property effective Feb. 26, 2021, with a closing date of April 26, 2021; time is of the essence.
- Addendum #2 (mutually executed) provided a 60-day Due Diligence Period beginning upon Buyer’s receipt of Seller’s due-diligence materials and stated that if Buyer did not give written notice of its election not to purchase before expiration, Buyer would be deemed to have approved the property and the parties would proceed to closing; a one-time 30-day extension was available for $5,000.
- Disputes arose about whether Walls had provided requested materials, when the due-diligence period began/ended, and Walls’ later attempts to secure a release after receiving higher offers.
- Lafayette Land filed a declaratory-judgment action and recorded a lis pendens to compel closing; the circuit court initially entered judgment for Lafayette Land, then vacated it and, after a second trial, ruled for Walls, finding the agreement had expired and no duties remained.
- The Alabama Supreme Court held Addendum #2’s silence-as-acceptance clause unambiguous, found the due-diligence period had ended and that Lafayette Land never gave written rejection, and reversed and remanded the circuit court judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Addendum #2’s silence-at-expiration clause required closing if no written rejection was given | Lafayette Land: clause is unambiguous; absence of written rejection before the due-diligence period expired deemed approval and required closing | Walls: disputes when due-diligence began (or whether it began); argues agreement "expired" and due-diligence materials were unspecified so no obligation to close | Court: clause unambiguous; due-diligence expired and Lafayette Land never gave written rejection; parties obligated to close; trial court reversed |
| Whether Walls could avoid closing by asserting buyer default termination or waiver arguments | Lafayette Land: no default by buyer shown; plaintiff entitled to enforcement under contract language | Walls: points to seller remedy to terminate on buyer default and contends Lafayette waived its argument by inadequate authority citation | Court: no evidence Lafayette defaulted; Lafayette cited controlling contract-construction precedent; Walls' arguments fail |
Key Cases Cited
- Fadalla v. Fadalla, 929 So. 2d 429 (Ala. 2005) (ore tenus factual findings are presumed correct; legal conclusions reviewed de novo)
- Exxon Mobil Corp. v. Ala. Dep't of Conservation & Nat. Res., 986 So. 2d 1093 (Ala. 2007) (if contract interpreted from its four corners, review is de novo)
- Kershaw v. Kershaw, 848 So. 2d 942 (Ala. 2002) (construe written agreement from its language when unambiguous)
- Shoney's, LLC v. MAC East, LLC, 27 So. 3d 1216 (Ala. 2009) (contract should be construed as written under Alabama law)
- Reeves Cedarhurst Dev. Corp. v. First AmFed Corp., 607 So. 2d 184 (Ala. 1992) (contract words given their ordinary meaning)
- Southland Quality Homes, Inc. v. Williams, 781 So. 2d 949 (Ala. 2000) (courts may not twist plain contract terms to create ambiguity)
