MAC East, LLC v. Shoney's Inc.

Filing 65

MEMORANDUM OPINION AND ORDER directing as follows: 1) Summary judgment is entered in favor of Shoney's on count one of the Amended Complaint (breach of contract), as is mandated by MAC East, LLC v. Shoney's, 535 F.3d 1293 (11th Cir. 2008); 2) Summary judgment is entered in favor of Shoney's on count two of the Amended Complaint (tortious interference), as is mandated by MAC East, LLC v. Shoney's, 578 F.3d 1282 (11th Cir. 2009). Signed by Hon. Chief Judge Mark E. Fuller on 10/26/2009. (Attachments: # 1 Civil Appeals Checklist) (wcl, )

IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION M A C EAST, LLC, P la in tif f , v. S H O N E Y 'S , INC., D e f e n d a n t. ) ) ) ) ) ) ) )

C A S E NO. 2:05-cv-1038-MEF (W O )

MEMORANDUM OPINION AND ORDER
T h is cause is before the Court on remand from the Eleventh Circuit. In successive o p in io n s , the Circuit reversed this Court's entry of summary judgment for the plaintiff, M A C East, LLC ("MAC East"), on its tortious-interference and breach-of-contract claims a n d directed this Court to enter summary judgment on both claims for the defendant, S h o n e y's , Inc. ("Shoney's"). See MAC East, LLC v. Shoney's, 535 F.3d 1293 (11th Cir. 2 0 0 8 ) (tortious interference); MAC East, LLC v. Shoney's, 578 F.3d 1282 (11th Cir. 2 0 0 9 ) (breach of contract).1 The Circuit based its breach-of-contract opinion on the S u p re m e Court of Alabama's answer to a certified question on an issue of Alabama c o n tra c t law. See Shoney's LLC v. MAC East, LLC, No. 1071465, 2009 WL 2343674 (A la . July 31, 2009). D e s p ite the Circuit's unequivocal mandate to this Court, MAC East now argues M A C East also sought a declaratory judgment in the third count of its complaint, b u t this Court dismissed that count as moot in its order granting summary judgment, and th a t count is not relevant here.
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that one of its claims against Shoney's for breach of contract has survived the Circuit's d e c is io n s . Specifically, MAC East asserts that it alleged two independent theories of b re a c h of contract in its complaint, that is, that Shoney's breached the lease contract it had a s s ig n e d to MAC East (1) when it refused to approve a proposed sublease without any c o m m e rc ia lly reasonable justification, and (2) when it demanded more money from MAC E a st as a condition of approval of the proposed sublease.2 As far as this Court can make o u t, MAC East's argument is that because the Eleventh Circuit explicitly addressed only th e refusal-to-approve theory in its opinion on breach of contract, the existence of a d e m a n d -f o r-p a ym e n t breach is still an open question before this Court. T h is Court finds that MAC East's argument is without merit. This Court clearly a g re e d with MAC East's demand-for-payment theory in its order granting summary ju d g m e n t. In that order, the Court applied a commercial-reasonableness standard to the p ro v is io n in the contract permitting Shoney's to accept or reject a proposed sublease in its " s o le discretion" and ruled that Shoney's had not been commercially reasonable in either re je c tin g the proposed sublease or demanding more money as a condition of approval.3 In In an earlier filing (Doc. #29), MAC East argued: "Shoney's intentional act of d e m a n d in g such a payment . . . constituted a breach of contract . . . even if the Court finds th a t Shoney's had the right to act arbitrarily and capriciously without regard to c o m m e rc ia l standards when judging the suitability of a subtenant." Citing Homa-Goff Interiors, Inc. v. Cowden, 350 So. 2d 1035 (Ala. 1977), this C o u rt explained that the lease contract does not necessarily give Shoney's "the right to a rb itra rily and capriciously reject a proposed sublease or add new conditions." MAC E a st, LLC v. Shoney's LLC, 510 F. Supp. 2d 541, 545 (M.D. Ala. 2007) (emphasis a d d e d ). The Court also noted: "The undisputed evidence before this Court establishes as a matter of law that Shoney's demand for additional payment, which was an additional te rm not included in Paragraph 19 was unreasonable and MAC East is therefore entitled 2
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other words, the Court decided both breach-of-contract theories at the same time and u n d e r the same rule of law¯the commercial-reasonableness standard. Because the b re a c h -o f -c o n tra c t claim arose out of only one act of Shoney's¯refusing to approve a p ro p o s e d sublease unless MAC East paid more money¯and could be resolved by the a p p lic a tio n of one rule of law, this Court did not artificially break up the breach-ofc o n tra c t claim into two parts in its order granting summary judgment. N o r does this Court believe that the Eleventh Circuit intended to break up the b re a c h -o f -c o n tra c t claim into two parts when it expressly referred to the refusal-to-accept th e o ry but not to the demand-for-payment theory in its breach-of-contract opinion. The is su e before the Circuit on appeal was whether this Court was correct to apply the c o m m e rc ia l-re a so n a b le n e s s standard to the contract provision in question. Based on the S u p re m e Court of Alabama's answer to the certified question, the Circuit decided that this C o u rt was not correct to apply the commercial-reasonableness standard, and it ruled that th e contract provision in question gave Shoney's total and unfettered discretion to accept o r reject any proposed sublease for any reason or even for no reason at all. The logic of th is ruling does not distinguish between either of MAC East's theories of breach of c o n tra c t. Under the Circuit's holding, Shoney's had the right under the contract to refuse to accept any proposed sublease outright, without any commercially reasonable reason, a n d conversely could have accepted it for any reason at all, even if that reason was that M A C East was willing to pay more money to Shoney's. Given the rationale of this

to summary judgment on its breach of contract claim." Id. at 546 (emphasis added). 3

ruling, and because the Circuit's opinion was in response to a decision by this Court c o n f la tin g MAC East's twin breach-of-contract theories, this Court believes that the C irc u it has reversed this Court's ruling as to both breach-of-contract theories. E v e n if this were not the case, this Court would still refuse to accept MAC East's a rg u m e n t that any issue remains open in the face of the Circuit's unequivocal instruction to this Court to enter summary judgment in favor of Shoney's on the entire breach-ofc o n tra c t claim. This Court clearly decided the issue in question, and Shoney's appealed th e whole case to the Circuit after this Court entered a final judgment. Now that the C irc u it has remanded the case back to this Court with such explicit instructions, it is not th e place of this Court to clarify or gap-fill the Circuit's opinion. That is a matter for a p p e a l, not remand. A c c o rd in g ly, it is hereby ORDERED as follows: 1. Summary judgment is entered in favor of Shoney's on count one of the A m e n d e d Complaint (breach of contract), as is mandated by MAC East, L L C v. Shoney's, 535 F.3d 1293 (11th Cir. 2008). 2. S u m m a ry judgment is entered in favor of Shoney's on count two of the A m e n d e d Complaint (tortious interference), as is mandated by MAC East, L L C v. Shoney's, 578 F.3d 1282 (11th Cir. 2009). D O N E this the 26th day of October, 2009.

/s/ Mark E. Fuller CHIEF UNITED STATES DISTRICT JUDGE 4