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G.R.L.C. Trust v. Garrison Decatur Crossings, LLC

Supreme Court of Alabama

June 15, 2018

G.R.L.C. Trust
v.
Garrison Decatur Crossings, LLC

          Appeal from Morgan Circuit Court (CV-15-900579)

          SELLERS, JUSTICE.

         G.R.L.C. Trust ("the Trust"), a trust formed under the laws of Texas, appeals from a summary judgment in favor of Garrison Decatur Crossings, LLC ("Garrison Decatur"), in Garrison Decatur's action for a judgment declaring the need for reformation of a recorded memorandum of lease on the ground of a mutual mistake. We affirm.

         On May 31, 2006, the Trust executed a ground lease, leasing to Franklin Land Associates, LLC ("Franklin Land"), real property on which a portion of a shopping center known as "The Crossings of Decatur Shopping Center" is located (hereinafter referred to as "the subject property"). The subject property is the only property the Trust owns in Morgan County. The ground lease was for a term of 50 years and included the option for Franklin Land or its successors to purchase the subject property after 25 years. The ground lease did not initially include a legal description of the subject property. Rather, the parties agreed that, after Franklin Land obtained a survey of the subject property, they would execute an amended ground lease incorporating an "Exhibit A, " which would contain the legal description of the subject property as surveyed.

         As agreed, Franklin Land and the Trust executed an amended ground lease on August 31, 2006 ("the ground lease"), which now included an Exhibit A with the legal description of the subject property. On that same day, the parties executed a "Memorandum of Ground Lease" ("the lease memorandum"), which states, in pertinent part, that Franklin Land has leased from the Trust certain property "particularly described on Exhibit A attached hereto and incorporated herein."

         On September 21, 2006, Franklin Land, as part of its assignment of its leasehold interest in the ground lease to Decatur Investment Partners, GP, a Georgia partnership, recorded the lease memorandum in the Morgan County Probate Office pursuant to § 35-4-6, Ala. Code 1975, providing that leases for more than 20 years are void for the excess over said period unless they are recorded within one year after execution. Although the lease memorandum references Exhibit A as being attached and incorporated into the memorandum, the exhibit was not included with the memorandum when it was recorded.

         In 2011, Garrison Decatur began negotiations to acquire the ground lease from Decatur Investments and to become a tenant of the Trust in accordance with the terms of the ground lease and the lease memorandum. In conjunction with the negotiations, Garrison Decatur requested that the Trust warrant that the ground lease was valid and in force. Accordingly, on February 25, 2012, the Trust executed a landlord-estoppel agreement with Garrison Decatur and Wells Fargo, N.A., reciting, in part, that the Trust owned the premises described in Exhibit A, that Garrison Decatur contemplated becoming the lessee under the ground lease, and that Garrison Decatur would borrow a specific amount of money from Wells Fargo Bank, N.A., to acquire its leasehold interest in the subject property and the ground lease from Decatur Investments. The Trust specifically warranted in the landlord-estoppel agreement that the ground lease, having a term of 50 years, was in full force and effect.

         In 2015, Garrison Decatur discovered that "Exhibit A, " containing the legal description of the subject property, had not been included with the lease memorandum that was on file in the Morgan County Probate Office. Accordingly, Garrison Decatur sued the Trust, seeking (1) the reformation of the lease memorandum to include Exhibit A containing the legal description of the subject property and (2) a judgment declaring that the lease memorandum, as reformed, related back to the date of its original execution. The Trust filed an answer and a counterclaim, seeking a judgment declaring that the ground lease was void for any term beyond 20 years under §§ 35-4-6 and 35-4-51.1, Ala. Code 1975. After engaging in discovery, both Garrison Decatur and the Trust moved for a summary judgment pursuant to Rule 56(c), Ala. R. Civ. P., arguing their respective positions concerning reformation of the lease memorandum to include Exhibit A. The trial court entered a summary judgment in favor of Garrison Decatur, concluding that the evidence was undisputed that Franklin Land and the Trust had intended for the legal description of the subject property to be included with the lease memorandum when the lease memorandum was recorded and that the omission of the legal description from the lease memorandum was the result of an inadvertent mutual mistake on the part of Franklin Land and the Trust. Accordingly, the trial court (1) ordered that the lease memorandum executed on August 31, 2006, be reformed to include Exhibit A; (2) declared that the lease memorandum, as so reformed, related back to the date of its original execution; (3) declared that the lease memorandum, as so reformed, complied with § 35-4-6, Ala. Code 1975, because it had been filed in the probate office within one year of its execution; (4) declared that the amended ground lease was valid and enforceable for its full term of 50 years; and (5) declared that the Trust was estopped from denying that the ground lease was valid and enforceable for its full term of 50 years. The Trust appealed.

Standard of Review and Applicable Law
"'The standard of review applicable to a summary judgment is the same as the standard for granting the motion....' McClendon v. Mountain Top Indoor Flea Market, Inc., 601 So.2d 957, 958 (Ala. 1992).
"'A summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. The burden is on the moving party to make a prima facie showing that there is no genuine issue of material fact and that it is entitled to a judgment as a matter of law. In determining whether the movant has carried that burden, the court is to view the evidence in a light most favorable to the nonmoving party and to draw all reasonable inferences in favor of that party. To defeat a properly supported summary judgment motion, the nonmoving party must present "substantial evidence" creating a genuine issue of material fact--"evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." Ala. Code 1975, § 12-21-12; West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala. 1989).'
"Capital Alliance Ins. Co. v. Thorough-Clean, Inc., 639 So.2d 1349, 1350 (Ala. 1994). Questions of law are reviewed de novo. Alabama Republican Party v. McGinley, 893 So.2d 337, 342 (Ala. 2004)."

Pritchett v. ICN Med. Alliance, Inc., 938 So.2d 933, 935 (Ala. ...


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