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Jackson v. Brewer C.

Alabama Court of Civil Appeals

June 23, 2017

Karen H. Jackson
v.
Jeannan C. Brewer

         Appeal from Covington Circuit Court (CV-13-900164)

          MOORE, Judge.

         Karen H. Jackson appeals from a judgment entered by the Covington Circuit Court ("the trial court") awarding Jeannan C. Brewer ("Brewer") damages in the amount of $5, 600, plus attorney's fees in the amount of $4, 502.83, on Brewer's breach-of-contract claim. We affirm the trial court's judgment.

         Procedural History

         On October 2, 2013, Brewer filed a complaint against Jackson, seeking damages for an alleged breach of a purchase agreement, which provided that John Brewer would purchase certain commercial property owned by Jackson. Brewer alleged that the property made the subject of the purchase agreement was a portion of a building owned by Jackson that was to be subdivided along an interior wall, with the property lying to the north of the interior wall to be sold to John Brewer and the property lying south of the interior wall to be retained by Jackson. Brewer alleged that she was the assignee of John Brewer and that she had paid a $5, 000 deposit to secure the purchase agreement. Brewer asserted that Jackson had breached the purchase agreement by refusing to close on the sale of the property despite repeated requests from Brewer, and she requested damages and attorney's fees. Jackson apparently filed a counterclaim requesting that Brewer pay her attorney's fees based on the terms of the purchase agreement. Following a trial, the jury returned a verdict in favor of Brewer on May 26, 2016, and awarded her $5, 600 in damages and reasonable attorney's fees "as called for by the [purchase agreement], " to be determined by the trial court.

         On June 29, 2016, Jackson filed a motion essentially requesting that the trial court enter judgment as a matter of law in her favor; Jackson asserted that the purchase agreement was "illegal and void due to its violation of the Andalusia City's Code subdivision regulations and § 11-52-30[, ] Ala. Code 1975." Specifically, Jackson relied on the testimony of Micah Blair, the assistant director of Planning and Development for the City of Andalusia ("the City"), who testified that Jackson's property could not be subdivided without approval of the City, that no one had applied to subdivide the property, and that the proper authorities had not approved the subdivision of the property. In support of her motion, on September 6, 2016, Jackson filed two additional motions seeking to supplement the record -- one to admit the affidavit of Blair, in which he summarized his trial testimony, and a second to admit copies of certain ordinances of the City.

         On September 21, 2016, the trial court entered separate orders denying the motions to supplement the record and denying the motion for the entry of a judgment as a matter of law; it also entered a judgment in favor of Brewer, awarding her damages in the amount of $5, 600 and attorney's fees in the amount of $4, 502.83. On November 2, 2016, Jackson filed her notice of appeal.

         Discussion

         On appeal, Jackson argues that the trial court erred in entering a judgment for Brewer despite the illegality of the purchase agreement.

         Before addressing the merits of the appeal, we first reject Brewer's contention that Jackson waived the illegality issue and that she was estopped to assert the illegality of the purchase agreement by relying on the agreement in her counterclaim. Because an illegal contract is void ab initio and will not support a cause of action or a judgment, a party can raise the illegality of a contract at any time. Kilgore Dev., Inc. v. Woodland Place, LLC, 47 So.3d 267, 271 (Ala. Civ. App. 2009). In Limestone Creek Developers, LLC v. Trapp, 107 So.3d 189, 193-94 (Ala. 2012), our supreme court explained:

"[T]he judicial system may not be used to enforce illegal contracts. See, e.g., Ex parte W.D.J., 785 So.2d 390, 393 (Ala. 2000) ('Moreover, this Court has held that "[a] person cannot maintain a cause of action if, in order to establish it, he must rely in whole or in part on an illegal or immoral act or transaction to which he is a party." Hinkle v. Railway Express Agency, 242 Ala. 374, 378, 6 So.2d 417, 421 (1942). In Oden v. Pepsi Cola Bottling Co., 621 So.2d 953 (Ala. 1993), this Court stated that the purpose of the Hinkle rule is to ensure that "'those who transgress the moral or criminal code shall not receive aid from the judicial branch of government.'" 621 So.2d at 955....' (emphasis omitted)). See also Kilgore Dev., Inc. v. Woodland Place, LLC, 47 So.3d 267, 271 (Ala. Civ. App. 2009) (holding that subdivision-control statutes were implemented to protect the public, not to raise revenue, and that contracts violating those statutes are accordingly void).
"Indeed, the policy behind this principle has been deemed to be of such importance that contracts found to violate the law will not be enforced even if, as has been alleged in this case, the defaulting party failed to properly plead the affirmative defense of illegality. Brown v. Mountain Lakes Resort, Inc., 521 So.2d 24, 26 (Ala. 1988) ('"'It is the rule ... in Alabama and a few other jurisdictions to not enforce a contract in violation of the law and to deny the plaintiff the right to recover upon a transaction contrary to public policy, even if the invalidity of the contract or transaction be not specially pleaded and is developed by the defendant's evidence.'"' (quoting National Life & Accident Ins. Co. v. Middlebrooks, 27 Ala.App. 247, 249, 170 So. 84, 86 (1936), quoting in turn Shearin v. Pizitz, 208 Ala. 244, 246, 94 So. 92, 93 (1922)))."

         The policy against enforcing illegal contracts so strongly prevails in Alabama that a party can raise the issue even after a jury returns an adverse verdict based on the contract, as is the case in other jurisdictions. See Pacific Wharf & Storage Co. v. Standard Am. Dredging Co., 184 Cal. 21, 24, 192 P. 847, 849 (1920) (holding that the illegality of a contract can be raised in a posttrial motion). Thus, we reject Brewer's contention that Jackson waived the illegality defense by failing to raise it until after the jury returned its verdict.

         Based on the same policy considerations, Alabama law holds that a party cannot be prevented from asserting the illegality of a contract based on the theory of estoppel. SeeCooper v. Johnston, 283 Ala. 565, 569, 219 So.2d 392, 396 (1969) ("Vitality cannot be injected into an illegal transaction by way of estoppel."). Brewer alleges that Jackson relied on the purchase agreement to support her counterclaim for attorney's fees. The record does not contain a copy of the counterclaim, so we cannot discern whether, in fact, Jackson was seeking to enforce an attorney-fee provision in the purchase agreement, although Jackson seems to acknowledge as much in her brief to this court. See Roberts v. Roberts, 424 So.2d 644, 645 (Ala. Civ. App. 1982) ("The record cannot be factually enlarged, changed, altered or varied upon appeal by statements appearing in briefs of counsel, but the record on appeal must disclose the facts upon which the alleged error is founded before such an error may be considered."). Nevertheless, we hold ...


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