Appeal
from Madison Circuit Court (CV-17-900921)
STEWART, Justice.
Magic
City Capital, LLC ("Magic City"), appeals from a
summary judgment entered by the Madison Circuit Court
("the trial court") in favor of Twickenham Place
Partners, LLC ("Twickenham"). Because events that
occurred during the trial- court proceedings rendered the
action moot and the trial court, therefore, was divested of
subject-matter jurisdiction, we dismiss the appeal.
Facts
and Procedural History
The
following facts are undisputed. On August 15, 2014,
Twickenham executed a lease agreement with Huntsville Asian
Rim, LLC ("HAR"), in which HAR agreed to lease
certain property from Twickenham for the purpose of opening a
restaurant in Huntsville. Section 5.4 of the lease provided,
among other things:
"OWNERSHIP OF IMPROVEMENTS. All trade fixtures,
equipment and other property placed on the Premises by and
any alterations or replacements thereof, including, but not
limited to, all bars, booths, decorative light fixtures,
stoves, ovens and other restaurant equipment, shall remain
the property of, and may be removed by, [HAR]. Upon the
expiration or earlier termination of this Lease, any such
property belonging to [HAR] which [HAR] has failed to remove
from the Premises within thirty (30) days of said expiration
or termination shall become the property of [Twickenham].
[Twickenham] may thereafter elect to remove and dispose of
such property at [HAR'S] reasonable cost and expense.
Should [HAR] remove any such fixture, or any alteration or
replacement thereof, affixed to the Premises that was placed
on the Premises by [HAR], [HAR], at its sole cost and expense
shall repair any damage to the Premises caused by such
removal."
The lease also provided in § 14.3:
"[Twickenham] hereby expressly subordinates any and all
claim, right, lien (including, without limitation, any common
law or statutory landlord's lien), title and security
interest in and to all furniture, goods, equipment and
personal property of the security interest of [HAR'S]
lender, if any, either existing as of the execution date of
this Lease or hereafter."
On
November 17, 2014, HAR executed a security agreement in favor
of Magic City in exchange for a $250, 000 loan. Pursuant to
the security agreement, Magic City was granted a security
interest in HAR's personal property used in operating the
restaurant. In September 2015, HAR defaulted on its lease
obligations to Twickenham, and, thereafter, HAR removed some
of, but not all of, its personal property from the
restaurant. On October 5, 2015, Twickenham notified Magic
City by letter that HAR had defaulted on its lease
obligations. In that letter, Twickenham recognized Magic
City's priority lien on HAR's furniture and equipment
and indicated that it was potentially interested in acquiring
that property from Magic City. Twickenham asked that Magic
City contact Twickenham if it was interested in selling the
personal property. On October 15, 2015, Twickenham served HAR
with a notice of the termination of the lease.
At some
point thereafter, HAR defaulted on its loan obligations to
Magic City. According to Magic City's complaint, Magic
City declared HAR in default of the loan obligations and
demanded possession of the personal property from HAR and
from Twickenham. Twickenham denied that Magic City demanded
possession of the personal property from it.
In
February 2016, HAR filed a petition for protection pursuant
to Chapter 7 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the Northern District of
Alabama. The bankruptcy proceedings were terminated on May
17, 2017. According to Twickenham, Magic City did not assert
its purported superior interest in the personal property at
any time during the pendency of the bankruptcy proceedings.
On May 30, 2017, Magic City sued Twickenham and Prime, Inc.,
the new tenant for the property, seeking a judgment declaring
its security interest superior to Twickenham's and the
recovery of, or the reasonable value of, the personal
property.
On June
30, 2017, Twickenham and Prime filed a motion to dismiss in
which they asserted, among other things, that Prime did not
have possession or control of the personal property sought by
Magic City. On September 12, 2017, the trial court granted
the motion to dismiss in part and dismissed Prime as a
defendant. Thereafter, Twickenham filed an answer and
asserted various affirmative defenses, including the
doctrines of laches and equitable estoppel.
On June
8, 2018, Magic City filed a motion for a summary judgment in
which it argued that Twickenham's interest in the
personal property was subordinate to Magic City's
interest and that Twickenham had wrongfully converted the
personal property. In support of its motion, Magic City
submitted a copy of the lease agreement, a copy of the
security agreement, copies of correspondence between
Twickenham and HAR and Magic City, an affidavit of Brian
Bateh, a manager of Magic City, and an affidavit of Roy
Hockman, the former managing member of HAR. Hockman testified
in his affidavit that HAR had defaulted on its lease and loan
obligations and that Magic City had demanded possession of
the personal-property collateral from both HAR and
Twickenham. Hockman did not specify the dates on which the
alleged demands for possession of the personal property
occurred. Bateh provided affidavit testimony similar to
Hockman's.
On
September 13, 2018, Twickenham filed another motion to
dismiss in which it asserted that HAR's debt allegedly
secured by the personal property to which Magic City claimed
a superior interest had been paid in full by Hockman and,
therefore, that Magic City's claims were moot and there
was no longer a justiciable controversy before the trial
court. Magic City filed a response to Twickenham's motion
to dismiss in which it alleged that, in November 2014, when
HAR entered into the security agreement with Magic City,
Hockman had executed a guaranty agreement pursuant to which
he guaranteed all of HAR's obligations. Magic City
further asserted that Hockman had executed and delivered to
Magic City a mortgage in which he gave Magic City a lien
relative to some of his real property. Magic City alleged
that, on June 12, 2018, Hockman sold the real property and
remitted payment to Magic City to satisfy his obligations
under the guaranty agreement. Magic City argued that, as a
surety, Hockman was entitled to enforce Magic City's
rights in order to seek reimbursement through subrogation.
Magic City further asserted that Hockman, who was not a
party, ...