126 So. 3d 152
Ala.2013Background
- The lease allowed Herndon Oil to renew in five-year terms with rent escalating over time.
- Lease required Murel Mosley’s written consent to assign the lease; consent “shall not be unreasonably withheld.”
- In 2009 Herndon Oil sought consent to assign the lease to The Pantry; no consent was ever given.
- Herndon Oil transferred the lease to The Pantry in June 2009 without Murel’s consent; no renegotiation occurred.
- Murel’s daughter Pat, with power of attorney, sought to renegotiate the lease and testified Murel was concerned about fairness and rent amount.
- Trial produced evidence of attempts to renegotiate and of Murel’s belief that the lease was unfair; a jury awarded damages on contract and conversion claims, later reversed on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether consent was reasonably withheld | Hern-don Oil argues Murel unreasonably withheld consent to the assignment. | The Pantry and Herndon Oil argue withholding was reasonable to renegotiate rent. | Unreasonable withholding; contract validly allowing assignment despite lack of consent. |
| Whether the trial court properly addressed the conversion claim | Conversion arose from the improper assignment and occupancy. | No conversion because assignment was permitted and no personal property was unlawfully taken. | JML on conversion affirmed; reversal as to conversion claim. |
| Rowley v. City of Mobile applicability to withholding consent | Rowley supports landlord’s withholding if information about assignee is lacking. | Rowley is distinguishable because Pantry was identified in the assignment letter. | Rowley distinguishable; consent was not reasonably withheld. |
Key Cases Cited
- Rowley v. City of Mobile, 676 So.2d 316 (Ala.Civ.App.1995) (landlord not unreasonably withholding when no assignee identified)
- Norville v. Carr-Gottstein Foods Co., 84 P.3d 996 (Alaska 2004) (not reasonable to deny consent to charge higher rent)
- Kendall v. Ernest Pestana, Inc., 40 Cal.3d 488 (Cal. 1985) (landlord cannot withhold consent solely to extract higher rent)
- 1010 Potomac Assocs. v. Grocery Mfrs. of America, Inc., 485 A.2d 199 (D.C.1984) (withholding consent to sublease to obtain economic concessions improper)
- Fernandez v. Vazquez, 397 So.2d 1171 (Fla.Dist.Ct.App.1981) (denying consent for purely financial reasons fails reasonableness test)
- First American Bank of Nashville, N.A. v. Woods, 781 S.W.2d 588 (Tenn.Ct.App.1989) (landlord’s desire for economic concessions cannot justify withholding)