Alabama Psychiatric Services, P.C. v. 412 South Court Street, LLC.

81 So. 3d 1239, 2011 WL 4507364, 2011 Ala. LEXIS 166
CourtSupreme Court of Alabama
DecidedSeptember 30, 2011
Docket1100023
StatusPublished
Cited by7 cases

This text of 81 So. 3d 1239 (Alabama Psychiatric Services, P.C. v. 412 South Court Street, LLC.) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alabama Psychiatric Services, P.C. v. 412 South Court Street, LLC., 81 So. 3d 1239, 2011 WL 4507364, 2011 Ala. LEXIS 166 (Ala. 2011).

Opinion

MALONE, Chief Justice.

Alabama Psychiatric Services, P.C. (“APS”), appeals from a summary judgment entered by the Lauderdale Circuit Court in favor of 412 South Court Street, LLC (“Court Street”). We reverse and remand.

Facts

The evidence in the record, either undisputed or viewed in the light most favorable to APS, is substantially as follows.1 In May 2005, SRS Group, LLC, which was owned by Eugene Sak, acquired a building at 412 South Court Street in Florence (“the building”). Subsequently, Sak began substantial renovations to the building, including gutting and rebuilding the interior of the structure.

The building had two entrances. The main entrance to the building was in the rear of the building, adjacent to a parking lot that was used by employees and clients of the tenants of the building. In addition, the building had an entrance in front, but the front entrance was difficult to access from the parking lot. The route from the parking lot to the front entrance required one to walk around one side of the building across property belonging to a gas station and then to jump from a retaining wall. Alternatively, one could walk around the other side of the building from the parking lot to the front entrance, across property belonging to a hotel, along a route that several witnesses described as unsafe and “dangerous.” Sak testified that he personally used the entrance in the rear of the building because “the parking lot is oriented to that area ... so it would make common sense to use that as an entrance.”

In May 2006, Sak entered into negotiations with Make Believe, LLC, to lease space in the building for use as a gym and exercise facility. They reached an agreement pursuant to which Make Believe would lease the first and second floors of the building, including the first and second floors of an addition that would subsequently be built onto the main entrance in the rear of the building. According to Sak, he and Make Believe negotiated Make Believe’s entire lease for all this space at one time, before Make Believe took occupancy. Make Believe took occupancy of the first and second floors of the building in December 2006, and by January 2007 it had begun operating a gym known as the Metro Athletic Club or “the MAC.” According to Sak, in January 2007, all of Make Believe’s rental space [1242]*1242was physically completed except for that portion of Make Believe’s leased space that would be located in the addition.

In May 2006, while he was negotiating with Make Believe, Sak entered into discussions with APS about leasing office space in the building. Sak knew that APS would be leasing the space to provide psychiatric and mental-health-counseling services to patients.

During the negotiations with Sak for the space APS was considering leasing, Doyle Stewart, APS’s chief financial officer, and other officers and employees of APS asked Sak for information about the other tenants in the building, including the MAC. Stewart thought it unusual that a gym would be operating in a professional building. According to Stewart, in answer to his inquiries about the MAC, Sak portrayed the MAC as a small, expensive gym with “not a significant membership load.” During the ongoing negotiations between APS and Sak, the entrance to the MAC was located directly behind the elevators in what was then the main entrance area of the building. According to Stewart, he noted at that time that the entrance to the MAC and the gym facility itself were located so that they “would not cause a problem for anybody that wanted to go into the upper floors of the building. It was kind of off to itself.”

During his deposition, Stewart testified that, during the course of the lease negotiations, he “spent a lot of time” explaining to Sak that “a lot of [APS’s patients] are VIP-type people ... leaders in the community that come in for psychiatric services, and we have to keep their business, basically, confidential ... and private to the best extent that we can.” Stewart and other representatives of APS informed Sak that APS’s clients were psychiatric patients and that those clients would need to be able to enter the building and pass through the common areas with sufficient privacy that their destination at APS’s offices was not readily obvious to bystanders.

Stewart knew that Sak was planning to build an addition to the building at the main entrance. During the negotiations, Stewart inquired as to Sak’s plans for the addition. In response to those inquiries and to the inquiries of other APS personnel, Sak represented that the addition would include an atrium with a sitting area and a fountain accessible by a walled-in hallway. Sak represented to APS that the walled-in hallway would lead from the door of the main entrance to the building elevators, which could be used to access the various tenant spaces on the several floors of the building. Sak represented that the enclosed hallway would contain a directory or directions to the various tenant spaces in the building. At no point in response to APS’s repeated inquiries did Sak represent that Make Believe would be leasing space in the addition for use as a gym or that, when the addition was finished, APS’s patients would have to walk through Make Believe’s gym to access the elevators to reach APS’s offices.

During the negotiations, Mary Brown, an office manager for APS, told Sak that she was concerned about having a discreet entrance for APS’s clients and about potential noise from a gym facility in the building and that there would not be sufficient parking for APS patients and staff because of the use of the parking lot by members of the gym. Sak assured Brown that the noise problem would be solved with extra insulation, that parking would be sufficient for both the gym members and APS, that he would assign APS 30 of the 120 available parking spaces if necessary, and that, when construction of the addition was complete, the gym would have its own separate entrance. Sak also [1243]*1243assured Brown that the addition would house an atrium or other common areas and that the entrance to the building in the addition would lead into an enclosed common hallway that led to the building elevators.

Stewart and Brown both believed Sak’s representations that the addition would include a main entrance into an enclosed hallway that led to the building elevators, and they both thought that this would provide a sufficiently discreet entrance for APS’s clients. They both were involved in the lease negotiations between APS and Sak, and they testified that, had APS known that the entrance to the addition would be into an open gymnasium through which APS’s clients would have to walk to reach the elevators, they would not have signed a lease agreement for the property because such an entrance would not be sufficiently discreet or adequate for psychiatric patients who had to access the elevators to get to APS’s office space on the third floor.

On October 19, 2006, APS entered into a lease agreement with SRS Group, LLC, pursuant to which APS agreed to lease office space on the third floor of the building. After October 19, 2006, Stewart, Brown, and APS continued to ask Sak for specifics about the plans for the addition. Sak continued to represent that the addition would include a walled hallway from the main entrance to the elevators with space for common use on either side and that APS would be satisfied with the main entrance after the addition was complete.

Sometime in 2007, the building was sold to Court Street, of which Sak was a member.

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Cite This Page — Counsel Stack

Bluebook (online)
81 So. 3d 1239, 2011 WL 4507364, 2011 Ala. LEXIS 166, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alabama-psychiatric-services-pc-v-412-south-court-street-llc-ala-2011.