Brown v. Butts

214 So. 3d 1181, 2016 Ala. Civ. App. LEXIS 47
CourtCourt of Civil Appeals of Alabama
DecidedFebruary 12, 2016
Docket2140962
StatusPublished
Cited by2 cases

This text of 214 So. 3d 1181 (Brown v. Butts) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. Butts, 214 So. 3d 1181, 2016 Ala. Civ. App. LEXIS 47 (Ala. Ct. App. 2016).

Opinion

MOORE, Judge.

Kenith Brown and his wife, Laqunda Brown,1 appeal from a judgment of the Crenshaw Circuit Court (“the trial court”) reforming a “residential lease” (“the contract”) that they had entered into with Ronnie Butts and his wife, Tammy Butts, regarding the lease and purchase of real property and a mobile home located in Luverne. We reverse the trial court’s judgment.

Procedural History

On May 28, 2013, the Buttses filed a complaint against the Browns, seeking, pursuant to Ala.Code 1975, § 8-1-2, to reform the contract that they had entered into with the Browns. The Buttses attached a copy of the contract to their [1184]*1184complaint as an exhibit; that contract identified the Buttses as “Lessor” and the Browns as “Lessee.” Pursuant to the contract, the Buttses agreed to lease to the Browns a mobile home and real property-located in Luverne for a lease term of 30 years—June 1, 2004, to June 30, 2034—for $728 per month. The contract also provided, among other things:

“12. Lessee agrees that Lessor shall have the right to attach ‘For Sale’ or ‘For Rent’ signs or placards on the premises during the last thirty days of the lease term and to show the premises to any person desiring to rent or purchase the premises.
“a) The Lessee hereby and herewith shall have an Option to buy the premises at anytime during the Lease period. Said purchase price shall be $85,000.00. Lessor agrees to apply the entire amount of all lease payments made by Lessee excluding late charges or fees toward a down payment for said purchase at the time of purchase.”

In their complaint, the Buttses asserted that the contract contained an error that was the result of either a mutual mistake of the parties or a mistake of the Buttses that, the Buttses asserted, the Browns knew of or should have suspected at the time the contract was drafted and executed. The Buttses also asserted that the contract had omitted certain necessary clauses and that, as a result, it further failed to properly express the intent of the parties. The Browns answered and counterclaimed, asserting claims of “fraud, misrepresentation, and deceit” and breach of contract against the Buttses. The Buttses filed a reply to the Browns’ counterclaims. Following a hearing on January 6, 2015, the trial court entered a judgment on March 13, 2015, providing, in pertinent part:

“The Court finds that the lease agreement by and between the parties dated May, 2004, is an ambiguous agreement in that it purports to be a thirty (30) year lease agreement but provides for an option price to be paid in full by applying the entire lease payments which would have provided for payment in full of the sales price after the 117th monthly payment. The Court further finds the contract to be ambiguous in allowing for the full amount of the purchase price to be paid after payment of less than one-third (1/3) of the number of lease payments which would have been made in the thirty (30) year life of the lease agreement; allowed for the [Buttses] to erect signs for sale or rent during the last thirty (30) days of the thirty (30) year term; failed to provide any method for the [Browns] to exercise their option rights; failed to provide any method of conveyance of the leased premises; failed to require the [Buttses] to convey a free and clear title to the [Browns] in the event the [Browns] exercised their option to purchase. The Court is further concerned about the validity of [the] lease agreement in that it was not recorded and would be void pursuant to Section 35-4-6, Code of Alabama, after a period of twenty (20) years.
"....
“Therefore, the Court finds that the contract between the [Buttses] and [the Browns] dated May, 2004, does not express the true intent of the parties and reforms the same to the extent that the [Browns] shall only be allowed to exercise their option to purchase the lease property by paying to the [Buttses] the balance due on their financing to Land Investment Group, LLC, on the real estate contract and the balance due CIT Group, or its assigns, at the time they [1185]*1185elect to exercise their option to purchase.”

The Browns filed a postjudgment motion on April 10, 2015; that motion was denied by the trial court on June 16, 2015. The Browns filed their notice of appeal to the Alabama Supreme Court on July 28, 2015; that court subsequently transferred the appeal to this court, pursuant to § 12-2-7(6), Ala.Code 1975.

Facts

Ronnie testified that he and Tammy had purchased 18 acres of real property (“the real property”) in July 2000 for $21,000 from Land Investment Group, LLC. The sales contract indicated that the Buttses made a $2,000 down payment and agreed to make 180 monthly payments of $203.55, which included interest calculated at a rate of 10% per annum. The Buttses thereafter purchased a double-wide mobile home (“the mobile home”) in November 2000, which they placed on the real property in December 2000. The Buttses financed the purchase of the mobile home through CIT Group/Sales Financing, Inc. The terms of the security agreement from that purchase indicate that the Buttses made a down payment of $5,561.85 and agreed to pay a balance of $50,168 through 360 monthly payments of $426.25, which included interest at a rate of 9.62% per annum.

Ronnie stated that, at some point before September 2003, he and Tammy had decided to sell the real property and the mobile home and that the Browns had subsequently contacted him and expressed an interest in purchasing both the real property and the mobile home. Ronnie testified that he and Tammy offered to sell the real property and the mobile home together for a total price of $85,000. According to Ronnie, at that time, he and Tammy had owed a total of approximately $75,000 on the notes that were secured by the real property and the mobile home. The Buttses set the sales price at $85,000 because they had hoped to recover additional amounts that they had paid for improvements to the property and to make a small profit. On September 25, 2003, the parties executed a document entitled “Offer to Purchase Real Estate” in which the Browns agreed to purchase the real property and the mobile home for $85,000, subject to their ability to obtain a mortgage in an amount of not less than $85,000 with an interest rate not to exceed 7.5%.

The parties all testified that the Browns were unable to obtain third-party financing to cover the $85,000. Ronnie subsequently presented the Browns with a lease agreement, pursuant to which they could lease the mobile home for one year for $500 per month; the Browns, however, declined to sign that agreement. Ronnie testified that he had subsequently “come to terms” with the Browns to sell the real property and the mobile home to them for $728 per month to be paid over the course of 30 years. Ronnie testified that he had determined the monthly payment amount to be included in the contract by adding together $430, which was the approximate amount of his and Tammy’s monthly payment on the mobile home, plus $203, which was the approximate amount of his and Tammy’s monthly payment on the real property, plus monthly amounts for taxes and insurance costs. Ronnie testified that he had made the contract term 30 years because his and Tammy’s note on the mobile home was a 30-year note.

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Bluebook (online)
214 So. 3d 1181, 2016 Ala. Civ. App. LEXIS 47, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-butts-alacivapp-2016.