Pinnacle Properties, LLC v. Guaranteed Rate, Inc.

Filing 54

MEMORANDUM OPINION & ORDER, Dft's 44 Motion for Summary Judgment & Plf's 48 Motion for Summary Judgment are both DENIED as set out. The injunctive relief is DISMISSED as MOOT. This matter will be set for a bench trial, which will address both parties' declaratory judgment claims, Dft's breach of contract counterclaim & any damages. Signed by District Judge Terry F. Moorer on 3/6/25. (tot)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
PINNACLE PROPERTIES, LLC,

)
)
Plaintiff/Counterclaim Defendant, )
)
v.
)
)
GUARANTEED RATE, INC.,
)
)
Defendant/Counterclaim Plaintiff. )

Civ. Act. No.: 1:23-CV-198-TFM-MU

MEMORANDUM OPINION AND ORDER
Pending before the Court are cross motions for summary judgment, Defendant Guaranteed
Rate, Inc.’s Motion for Summary Judgment and Incorporated Brief in Support Thereof (Doc. 44,
filed 05/20/24) and Plaintiff Pinnacle Properties, LLC’s Motion for Summary Judgment and
Memorandum Brief (Doc. 48, filed 06/05/24). Each party timely submitted their respective
responses and replies. See Docs. 50, 51,52, 53. Having considered the motions, responses, replies,
evidentiary submissions in support of the motions, and relevant law, the Court finds both motions
are due to be denied.
I.

PARTIES AND JURISDICTION

Plaintiff/Counterclaim Defendant Pinnacle Properties, LLC (“Plaintiff” or “Pinnacle”)
seeks declaratory judgment and injunctive relief against Defendant Guaranteed Rate, Inc.
(“Defendant” or “Guaranteed”). Guaranteed asserts four (4) counterclaims against Pinnacle. This
Court has subject matter jurisdiction and venue over this matter pursuant to 28 U.S.C. § 1332.
The parties do not contest jurisdiction or venue, and the Court finds sufficient support exists
for both.

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II.
A.

BACKGROUND

Factual Background
On or around December 30, 2021, Pinnacle and Guaranteed entered into a commercial

lease with Pinnacle as the lessor and Guaranteed as the lessee for a space in the Baypointe
Shopping Center. Id. at 13. The lease term was for 36 months and terminated on December 31,
2024. Id. at 13-14. However, the lease contained a termination provision that also provided for a
Termination Option:
LEASE TERMINATION: Lease shall terminate on the 31st day of December
2024. Tenant shall have an ongoing right to terminate this Lease effective any time
after the conclusion of the twelfth (12th) month of the Lease Term by providing
Landlord with ninety (90) days prior written notice (the “Termination Option”). If
Tenant exercises its Termination Option it shall simultaneously issue Landlord with
a termination fee (the “Termination Fee”) equal to three (3) month of Tenant’s then
in effect Gross Rent plus unamortized Landlord costs associated with this Lease.
This option shall be reciprocal in nature.
Doc. 48-2 at 19. Guaranteed paid rent pursuant to the lease until January 20, 2023, when it sent a
letter via overnight delivery giving notice that it was exercising the Termination Option. Doc. 481 at 6. In that notice, Guaranteed provided:
Guaranteed Rate, Inc. (“Guaranteed Rate”) hereby provides Lessor, with this
formal, ninety (90) day written notice of termination in connection with the above
referenced Premises without further notice, notwithstanding anything contained in
the Lease by-between the parties. The Termination Date shall be April 24, 2023
and rent shall be prorated as of that date.
Pursuant to the Lease, enclosed is an early termination payment (“Termination
Fee”) equal to three (3) months’ gross rent plus unamortized Landlord costs.
Doc. 48-2. Despite the letter indicating as such, no Termination Fee was included. Doc. 48-1 at
6. In addition to the letter, Guaranteed emailed Pinnacle via [e-mail] on January 23,
2023 with a copy of the Termination Notice and a separate request for unamortized expenses. Doc.
44-1 at 20. Defendant did not receive a response to the email and sent a follow-up email on January

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31, 2023, asking Plaintiff to confirm receipt and advise on the unamortized costs. Doc. 44-1 at 23.
Defendant sent another follow up email on February 10, 2023, again asking Plaintiff to confirm
the unamortized costs amount. Doc. 44-1 at 25. On February 13, 2023, Plaintiff advised that the
Termination Notice had been “forwarded . . . to the owner ([who] is out of town this week)” and
that Plaintiff would provide the unamortized costs amount “as soon as [it had] confirmation of the
amount.” Doc. 44-1 at 27. Plaintiff also asked Defendant if there was “anything we can do to
keep your location.” Id. Defendant responded that “termination is simply the result of employees
relocating and we simply do not need the space anymore, so there are no adjustments that would
change these plans unfortunately.” Id. at 30. After still not receiving the amount of amortized
costs from Plaintiff, Defendant sent another follow up email on February 24, 2023. Id. at 34.
Plaintiff was also attempting to negotiate a new lease with local employees Shannon Reville and
Joe Mosley. See Doc. 44-2. Those discussions ultimately ended with the employees informing
Mr. Pittman on February 24, 2023, that they were “stuck with having to move” and that they “have
movers scheduled for March 23.” Doc. 42-2 at 32.
On March 7, 2023, after still not hearing from Plaintiff as to the amount of amortized costs,
Defendant sent another email requesting the amount of the unamortized costs. Id. at 38. On March
20, 2023, Plaintiff sent a letter to Defendant. Id. at 42; Doc. 48-2 at 44. The letter did not provide
the unamortized costs, but rather informed Defendant that its Termination Notice was invalid and
demanded that Defendant continue making the monthly lease payments. Doc. 44-1 at 42; Doc.
48-2 at 44. On March 29, 2023, Defendant sent an email to Plaintiff in response to the letter,
noting that “[its] attempts to obtain confirmation of the termination fee from [Plaintiff] went
unanswered for some time, and [it has] yet to obtain a confirmation of the amount owed for
termination of the lease” and therefore could not issue the fee simultaneously with the notice. Doc.

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44-1 at 45. Defendant again requested the amount of unamortized costs. Id. Plaintiff did not
respond. Id. at 5. On March 31, 2023, Defendant sent another follow up email to Plaintiff noting
that “it still requires a confirmation of the fee amount to proceed with any payment.” Id. at 47.
Plaintiff did not respond. Id. at 5. On April 3, 2023, Defendant sent a check to Plaintiff in the
amount of $13,089.36, representing the rent due under the termination provision in the lease. Id.
at 49; Doc. 48-2 at 47. Tracking information indicates that Plaintiff received the check on April
7, 2023. Doc. 44-1 at 6.
Defendant vacated the property by April 24, 2023. Doc. 48-1 at 12. Plaintiff never
provided or confirmed the amount of the termination fee in response to Defendant’s requests. Doc.
17 at 3. On April 25, 2023, Plaintiff mailed the check back to Defendant and reiterated that
Defendant’s Termination Notice was invalid and contended that the lease remains in effect until
December 31, 2024. Doc. 48-2 at 43.
The notice provision in the lease provides:
Any notice, demand, communication, or election to exercise any option hereunder,
whether intended for the Lessor or for the Lessee, shall be in writing, and may be
served or delivered in person, or by prepaid U.S. Registered or Certified mail, or
by overnight courier service, to the address of the party intended as the recipient
thereof as such address is herein stated, or to such other address as the parties hereto
may at any time, and from time to time, designate in writing, (and as to notice to
Lessor, a copy thereof shall be mailed or delivered to the Agent).
Doc. 44-1 at 11. The lease also contains a non-waiver provision. The non-waiver provision
provides:
LESSOR’S RIGHTS CUMULATIVE: The failure of the Lessor to insist, in any
one or more instances, upon a strict performance of any of the covenants of this
lease, or to exercise any option herein contained, shall not be construed as a waiver,
or a relinquishment for the future, of such covenant or option, but the same shall
continue and remain in full force and effect. The receipt by the Lessor of rent, with
knowledge of the breach of any covenant hereof, shall not be deemed a waiver of
such breach, and no waiver by the Lessor of any provision hereof shall be deemed
to have been made unless expressed in writing, and signed by the Lessor, or agent.
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Id. at 12.
The parties dispute whether Guaranteed’s exercise of the Termination Option was
effective. On May 20, 2024, Guaranteed filed its motion for summary judgment. Doc. 44. On
June 5, 2024, Pinnacle filed its motion for summary judgment. Doc. 48. Both parties assert that
they are entitled to summary judgment in their favor on all of their respective claims, and
Guaranteed asserts that it is entitled to summary judgment on all claims asserted against it.
Pinnacle’s motion for summary judgment does not address Guaranteed’s counterclaims.
B. Procedural Background
Pinnacle originally filed this action on April 20, 2023, in the Circuit Court of Baldwin
County requesting a declaratory judgment (Count I) and injunctive relief (Count II) relating to a
commercial lease of property located in Baldwin County. See Doc. 1-1. Guaranteed timely
removed this action to this Court on May 26, 2023.
On September 14, 2023, Guaranteed filed its counterclaim against Pinnacle, which includes
four counts. Doc. 17. Count I asserts a breach of contract claim for Pinnacle’s refusal to provide
the amount of unamortized Landlord costs and refusal to accept Guaranteed’s termination. Id. at
5. Count II asserts a breach of the covenant of good faith and fair dealing, alleging that Pinnacle
failed to act in good faith by “refus[ing] to provide or confirm the amount of the termination fee
[and] interfer[ing] with Defendant’s ability to exercise its termination right in the Lease[.]” Id. at
6. Count III asserts a claim of wantonness, alleging that “Plaintiff knowingly rejected Defendant’s
termination and breached its duty to act in good faith, knowing that its actions would cause
Defendant harm and in attempt to extract additional sums of money from Defendant that it was
not entitled to under the lease. Id. at 6-7. Count IV asserts a claim for declaratory judgment,

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requesting that the Court find Defendant exercised its right to terminate the lease by providing
written notice of its intent to terminate the lease. Id. at 7.
III.

STANDARD OF REVIEW
“The Court shall grant summary judgment if the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R.
CIV. P. 56(a). A factual dispute alone is not enough to defeat a properly pled motion for summary
judgment; only the existence of a genuine issue of material fact will preclude a grant of summary
judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S. Ct. 2505, 2510, 91 L.
Ed. 2d 202 (1986). “[T]he substantive law will identify which facts are material.” Id. at 248, 106
S. Ct. at 2510. At the summary judgment stage, the court does not “weigh the evidence and
determine the truth of the matter,” but solely “determine[s] whether there is a genuine issue for
trial.” Id. at 249, 106 S. Ct. at 2511. The “evidence of the non-movant is to be believed, and all
justifiable inferences are to be drawn in [her] favor.” Tipton v. Bergrohr GMBH-Siegen, 965 F.2d
994, 999 (11th Cir. 1992) (internal citations and quotations omitted). An issue is genuine if the
evidence is such that a reasonable jury could return a verdict for the non-moving party. Mize v.
Jefferson City Bd. of Educ., 93 F.3d 739, 742 (11th Cir. 1996) (citing Hairston v. Gainesville Sun
Publ’g Co., 9 F.3d 913, 918 (11th Cir. 1993)). For factual issues to be considered genuine, they
must have a real basis in the record. Id.
The party asking for summary judgment bears the initial burden of showing the material
fact that should be decided at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548,
2552, 91 L. Ed. 2d 265 (1986)). The movant can meet this burden by presenting evidence showing
there is no dispute of material fact, or by showing the non-moving party has failed to present
evidence in support of some element of its case on which it bears the ultimate burden of proof. Id.

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at 322-23, 106 S. Ct. at 2552. A party must support its assertion that there is no genuine issue of
material fact by “citing to particular parts of materials in the record, including depositions,
documents, electronically stored information, affidavits or declarations, stipulations…admissions,
interrogatory answers, or other materials” or by “showing that the materials cited do not establish
the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible
evidence to support the fact.” FED. R. CIV. P. 56(c)(1). The admissibility of evidence is subject to
the same standards and rules that govern admissibility of evidence at trial. Clemons v. Dougherty
County, 684 F.2d 1365, 1369 n.5 (11th Cir. 1982) (citing Pan-Islamic Trade Corp. v. Exxon Corp.,
632 F.2d 539, 556 (5th Cir. 1980).
“When a moving party has discharged its burden, the non-moving party must then go
beyond the pleadings, and by its own affidavits, or by depositions, answers to interrogatories, and
admissions on file, designate specific facts showing that there is a genuine issue for trial.” Jeffery
v. Sarasota White Sox, Inc., 64 F.3d 590, 593-94 (11th Cir. 1995) (internal quotations
omitted)(citing Celotex, 477 U.S. at 324, 106 S. Ct. at 2553). The court must view facts and draw
all reasonable inferences in favor of the non-moving party. Moore v. Reese, 637 F.3d 1220, 1231
(11th Cir. 2011) (citing Rosario v. Am. Corrective Counseling Servs., Inc., 506 F.3d 1039, 1043
(11th Cir. 2007)). However, to avoid summary judgment, the non-moving party “must do more
than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec.
Indus. Co., Ltd. V. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538
(1986) (citations omitted). Conclusory assertions, unsupported by specific facts, presented in
affidavits opposing the motion for summary judgment are likely insufficient to defeat a proper
motion for summary judgment. Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888, 110 S. Ct. 3177,
3188, 111 L. Ed. 2d 695 (1990).

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Finally, Fed. R. Civ. P. 56(e) also provides that “[i]f a party fails to properly support an
assertion of fact or fails to properly address another party’s assertion of fact as required by Rule
56(c), the court may: (1) give an opportunity to properly support or address the fact; (2) consider
the fact undisputed for purposes of the motion; (3) grant summary judgment if the motion and
supporting materials—including the facts considered undisputed—show that the movant is entitled
to it; or (4) issue any other appropriate order.” FED. R. CIV. P. 56(e).

IV.

DISCUSSION AND ANALYSIS

At the center of this dispute is the early termination provision, and whether Guaranteed
substantially complied with the provision under Alabama law so as to warrant its enforcement, or
whether Guaranteed’s failure to include the termination fee simultaneously with the termination
notice moots the notice. Plaintiff moves the Court to grant summary judgment on its claim for
declaratory judgment that Defendant’s attempts to exercise the early termination option were
defective, and that the lease remains in effect until property terminated or until it expires. Plaintiff
also moves the Court to grant injunctive relief requiring Defendant to comply with the lease terms
until it is properly terminated, or it expires. As noted below, the injunctive relief claim is now
moot because the lease term expired in December 2024. Defendant moves the Court to grant
summary judgment in its favor on Plaintiff’s declaratory judgment and injunctive relief claims.
Defendant also moves the Court to grant summary judgment as to its counterclaims for breach of
contract, breach of the covenant of good faith and fair dealing, wantonness, and declaratory
judgment that Defendant properly exercised its rights under the early termination option by
providing notice to Plaintiff and submitting a check for $13,089.36.

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In a diversity action, Alabama’s substantive law governs the interpretation of the contract
at issue. Employers Mut. Cas. Co. v. Mallard, 309 F.3d 1305, 1307 (11th Cir. 2002) (Citations
omitted); see also SCI Liquidating Corp. v. Hartford Fire Ins., 181 F.3d 1210, 1214 (11th Cir.
1999) (applying Georgia law to contract interpretation in a diversity case).
Under Alabama law, the core principle of contract interpretation is so “practical” and “well
known as to require no citation of precedent.” Stacey v. Saunders, 437 So. 2d 1230, 1234 (Ala.
1983). Specifically, that “[a] written agreement is unambiguous and will be enforced (if otherwise
enforceable) where the intent of the parties can be fairly and reasonably gleaned from the four
corners of the document.” Id. (quoting Schmidt v. Ladner Construction Co., Inc., 370 So. 2d 970
(Ala. 1979)). “[T]he intent of the contracting parties is discerned from the whole of the contract.”
Homes of Legend, Inc. v. McCollough, 776 So.2d 741, 746 (Ala. 2000) (citing Loerch v. Nat’l
Bank of Commerce of Birmingham, 624 So. 2d 552, 553 (Ala. 1993)). Unless there is indication
the terms are used in a special or technical sense, they will be given their “ordinary, plain, and
natural meaning.” Id. If the terms are unambiguous, then the court will enforce the contract as
written. Id. If the terms are ambiguous (susceptible of more than one reasonable meaning), then
the court must use established rules of contract construction. Id. (citations omitted). “Last, if all
other rules of contract construction fail to resolve the ambiguity, then, under the rule of contra
proferentem, any ambiguity must be construed against the drafter of the contract.” Id. (citation
omitted).
Lease agreements are contracts; thus, “general principles of contract construction apply in
ascertaining the scope and meaning of a lease agreement.” Hardin v. Kirkland Enters., Inc., 939
So. 2d 40, 44 (Ala. Civ. App. 2006) (quoting Bowdoin Square, L.L.C. v. Winn-Dixie Montgomery,
Inc., 873 So. 2d 1091, 1098 (Ala. 2003)). Accordingly, when a lease is reduced to writing, the

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provisions of the writing are conclusive and govern the rights of the parties. Bowdoin Square, 873
So. 2d at 1098. Moreover, where there is more than one writing involved in a transaction, the
court interprets the writings together so that a harmonious operation can be given to each. ANCO
TV Cable Co. v. Vista Commc’ns Ltd. P’ship I, 631 So. 2d 860, 864 (Ala. 1993); see also Haddox
v. First Alabama Bank of Montgomery, N.A., 449 So. 2d 1226 (Ala. 1984) (citing Cole v. Yearwood,
241 Ala. 437, 3 So. 2d 1 (1941) (stating “two or more instruments executed contemporaneously
by the same parties in reference to the same subject matter constitute one contract and should be
read together in construing the contract.”).
Additionally, under Alabama law, waiver is generally a question of fact, which must be
decided by a jury. A court may determine the issue of waiver if only one reasonable inference can
be drawn from the evidence; otherwise waiver is not typically a question of law. See McMillan,
Ltd. v. Warrior Drilling & Eng’g Co., 512 So.2d 14, 38 (Ala. 1986) (“Nevertheless, the viability
of each of these defenses is a factual determination that must be left to the trier of fact unless only
one reasonable inference can be drawn from the evidence.”) (citations omitted).
A.

Declaratory Judgment Claims
A declaratory judgment serves the function of enabling parties to obtain a judicial

determination of their legal rights related to an actual controversy between them in advance of an
invasion of such rights and whether further relief is or could be claimed. Hudson v. Ivey, No. SC2022-0836, 383 So. 3d 636, 640 (Ala. 2023) (citation omitted). The Alabama Supreme Court
stated:
We also have recognized that one of the purposes of the Declaratory Judgment Act
is to render practical help in ending a controversy that has yet to reach the stage
where legal relief is immediately available and to enable parties between whom an
actual controversy exists or those between whom litigation is inevitable to have the
issues speedily determined when a speedy determination would prevent
unnecessary injury caused by the delay of ordinary judicial proceedings. Stated
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another way, declaratory-judgment actions are designed to set controversies to rest
before they lead to repudiation of obligations, invasion of rights, and the
commission of wrongs. A declaratory-judgment action requires only that there be
a bona fide justiciable controversy.
Harper v. Brown, Stagner, Richardson, Inc., 873 So. 2d 220, 224 (Ala. 2003) (internal citations
omitted and emphasis in original). The controversy must be “definite and concrete,” must be “real
and substantial,” and must seek relief by asserting a claim opposed to the interest of another party
“upon the state of facts which must have accrued.” Baldwin County v. Bay Minette, 854 So. 2d 42,
45 (Ala. 2003) (citation omitted and emphasis in original). “Declaratory judgment proceedings
will not lie for an anticipated controversy.” Creola Land Dev., Inc. v. Bentbrooke Housing, L.L.C.,
828 So. 2d 285, 288 (Ala. 2002) (quotation omitted).
Here, the parties assert opposing claims for declaratory judgment, and each claim that they
are entitled to summary judgment on their respective claims. Plaintiff “seeks declaratory judgment
that Guaranteed’s attempt to exercise its Termination Option is invalid and that the rent obligation
continues through the end of the three (3) year term of the lease agreement (until December 31,
2024) or until the Termination Option is properly exercised.” Doc. 48 at 11. Plaintiff argues that
the terms of the Termination Option are plain and unambiguous that the Termination Option is
only effective if the termination fee is simultaneously issued with the written notice, and because
Guaranteed did not issue the notice and check simultaneously, the notice was insufficient to
terminate the lease. Id. at 11-12. Defendant counters that it is entitled to summary judgment on
Plaintiff’s declaratory judgment claim because Plaintiff’s own bad faith frustrated Defendant’s
efforts and rendered it impossible for Defendant to tender a check for the unamortized costs with
the termination notice because Plaintiff refused to ever provide the amount of unamortized costs.
Doc. 44 at 11-12. Defendant also argues that it is entitled to summary judgment on its counterclaim
for declaratory judgment. Defendant seeks a declaration that it properly exercised its rights under
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the Termination Provision and has fulfilled its obligations under the Lease by providing notice to
Plaintiff of the termination and later submitting a check to Plaintiff for $13,089.36. Id. at 19.
While Plaintiff is correct that the language unambiguously states that Defendant was to
simultaneously issue the termination fee with the termination notice, the Court’s analysis does not
end there. Defendant argues that it could not have simultaneously issued the fee because, despite
requesting the unamortized costs from Plaintiff on several occasions, Plaintiff never provided those
costs. Plaintiff ignores the fact that, in order to issue the fee, Plaintiff needed to provide the
unamortized costs to Defendant.

Defendant requested that Plaintiff provide it with the

unamortized costs on six separate occasions, Plaintiff did not provide the costs to Plaintiff.
The parties dispute whether Defendant’s method of requesting the unamortized costs via
email was appropriate, and whether the non-waiver provision, read in tandem with the notice
provision in the lease, required Defendant to send any request for the unamortized costs via mail.
Waiver, as previously noted, is a question of fact that cannot be resolved on summary judgment.
See McMillan, 512 So.2d at 38. Though this case would be a bench trial, the Court is unable to
resolve this issue by dispositive motion and must do it in a manner where the Court may make
findings of fact.
Accordingly, both parties’ motions for summary judgment on their respective declaratory
judgment claims are DENIED.
B.

Pinnacle’s Injunctive Relief Claim
Plaintiff contends that it is entitled to “Preliminary and Permanent Positive Injunction

ordering Guaranteed Rate to comply with all terms of the Lease for the remainder of the Lease and
for any other relief which the Court deems proper.” Doc. 1-1 at 8; Doc. 48 at 13. This lease
expired on December 31, 2024. Thus, Plaintiff’s claim for preliminary and permanent injunction

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is moot because the lease term is over. Accordingly, both Motions for Summary Judgment are
DENIED as MOOT as to the injunction, as it relates to the rest of the lease.
C.

Guaranteed’s Breach of Covenant of Good Faith and Fair Dealing Claim
Defendant also moves the Court to grant summary judgment in its favor on its counterclaim

for breach of the covenant of good faith and fair dealing. Defendant asserts that Plaintiff breached
the covenant of good faith and fair dealing by refusing to provide the amount of unamortized costs.
Doc. 44 at 16. Plaintiff counters that this counter claim is “without merit” because Guaranteed’s
termination notice “was defective the moment it overnighted the Termination Notice without the
Termination Fee . . ..” Doc. 50 at 16. Plaintiff further counters that it is Guaranteed, not Pinnacle,
who has violated the covenant of good faith and fair dealing. Id.
Alabama recognizes “the general rule that every contract carries with it an implied-in-law
duty of good faith and fair dealing.” Hilley v. Allstate Ins. Co., 562 So. 2d 184, 190 (Ala. 1990).
“This duty provides that neither party will interfere with the rights of the others to receive the
benefits of the agreement.” Id. However, it is well-established in Alabama law that there is no
cause of action for breach of the implied duty of good faith and fair dealing. See Tanner v.
Church’s Fried Chicken, Inc., 582 So. 2d 449, 452 (Ala. 1991) (“This Court has clearly and
specifically held that a duty of good faith in connection with a contract is directive, not remedial,
and that therefore an action will not lie for breach of such a duty.”); see also Gov’t St. Lumber Co.
v. AmSouth Bank, N.A., 553 So. 2d 68, 72 (Ala. 1989) (holding that there was no independent cause
of action in Alabama for a breach of the duty of good faith and fair dealing). A breach of the duty
of good faith and fair dealing instead can be considered under a breach of contract argument.

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Accordingly, Guaranteed’s motion for summary judgment in favor of its counterclaim for
breach of the covenant of good faith and fair dealing is due to be DENIED. The claim is
considered subsumed under the breach of contract claim.
D.

Guaranteed’s Breach of Contract Claim
Finally, Defendant argues that it is entitled to summary judgment in favor of its breach of

contract claim. Doc. 44 at 14. Specifically, Defendant asserts that “Plaintiff breached the Lease
by failing to provide Defendant the amount of the unamortized costs” and that “Defendant was
ready, willing, and able to tender payment to Plaintiff for the unamortized costs” but Plaintiff
prevented Defendant from doing so by refusing to disclose the amount. Id. at 15.
Plaintiff counters that the plain and unambiguous terms of the termination option required
Defendant to provide a termination notice and termination fee simultaneously, and Defendant
failed to do so. Rather, Plaintiff claims that Defendant is the one who breached the lease agreement
because it did not include the termination fee with the termination notice. Doc. 50 at 9. Plaintiff
further argues that Defendant could have requested the unamortized costs before sending the
termination notice, and then it could have simultaneously sent the termination fee and the
termination notice. Id. at 10. Plaintiff also argues that Defendant’s requests for the unamortized
costs should have been sent pursuant to the notice provision in the lease, rather than via email to
Plaintiff’s real estate manager, and that Defendant’s failure to follow the notice provision,
essentially, did not require Plaintiff to respond to the request. Id. at 11-12. Finally, Plaintiff argues
that the non-waiver provision read in tandem with the notice provision in the lease required
Defendant to send any request for the unamortized costs via mail.
To prevail on a breach of contract claim under Alabama law, a party must establish: (1) the
existence of a valid contract binding the parties in the action, (2) its own performance under the

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contract, (3) the [other party’s] non-performance, and (4) damages. Ex parte American Heritage
Life Ins. Co., 46 So.3d 474, 477 (Ala. 2010) (citing Congress Life Ins. Co. v. Barstow, 799 So. 2d
931, 937 (Ala. 2001)); Shaffer v. Regions Fin. Corp., 29 So. 3d 872, 880 (Ala. 2009)
(quoting Reynolds Metals Co. v. Hill, 825 So.2d 100, 105 (Ala. 2002)).
Further, “there is an implied covenant that neither party [to a contract] shall do anything
which will have the effect of destroying or injuring the rights of the other party to receive the fruits
of the contract” and “[e]very contract imposes upon each party a duty of good faith and fair dealing
in its performance and its enforcement.” Hunter v. Wilshire Credit Corp., 927 So. 2d 810, 813 n.
5 (Ala. 2005) (quoting Lloyd Noland Found., Inc. v. City of Fairfield Healthcare Auth., 837 So.
2d 253, 267 (Ala. 2002)).
First, the Court notes that Plaintiff’s assertion that Defendant breached the lease by failing
to include the termination fee with the termination notice is inaccurate. Defendant had no duty to
exercise the termination option—it was an option with no obligation to perform. Therefore, it
cannot amount to a breach of contract. See Ex parte American Heritage Life Ins. Co., 46 So.3d
474, 477 (Ala. 2010) (citing Congress Life Ins. Co. v. Barstow, 799 So. 2d 931, 937 (Ala. 2001))
(explaining the requirements to prevail on a breach of contract claim under Alabama law). As
Defendant notes, its exercise of the provision can either be effective or ineffective, but it cannot
constitute a breach.
Second, as previously noted, Alabama law recognizes an implied duty of good faith and
fair dealing in every contract. “This duty provides that neither party will interfere with the rights
of the others to receive the benefits of the agreement.” Hilley, 562 So. 2d at 190. Plaintiff told
Defendant via email that it would provide the unamortized costs as soon as it could confirm them,
but Plaintiff never provided such costs. Plaintiff communicated via email with Defendant and

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employees of Defendant regarding the termination on numerous occasions, without indicating that
it believed the termination notice was ineffective. Plaintiff did not inform Defendant that it
believed Defendant’s termination notice was ineffective until March 20, 2023, almost two months
after receiving the notice and after it become clear that Defendant was not going to renegotiate the
lease. Despite informing Defendant that the termination notice was ineffective because it was not
accompanied by the termination fee, Plaintiff never provided the amount of said termination fee
to Defendant. To put it simply, given the above facts, the Court has questions in this case as to
whether Plaintiff has fulfilled its implied duty of good faith and fair dealing related to Defendants
right to exercise the termination option.
Regardless of these concerns, the parties dispute whether Plaintiff waived strict compliance
with the notice provision as it pertains to termination and the unamortized costs. This question of
fact must be resolved before the Court can rule on the breach of contract claim. Thus, summary
judgment is inappropriate and Defendant’s motion for summary judgment is due to be DENIED
as to its breach of contract counterclaim.
E.

Guaranteed’s Wantonness Claim
Defendant also moves the Court to grant summary judgment in its favor on its counterclaim

for wantonness. However,
Alabama law “does not recognize a tort-like cause of action for the breach of a duty
created by a contract.” McClung, 2012 U.S. Dist. LEXIS 63834, 2012 WL
1642209, at *7, citing Blake, 845 F. Supp. 2d at 1210. “[A] negligent failure to
perform a contract . . . is but a breach of the contract.” McClung, 2012 U.S. Dist.
LEXIS 63834, 2012 WL 1642209, at *7, quoting Blake, 845 F. Supp. 2d at 1210;
see also Barber v. Bus. Prods. Ctr., Inc., 677 So. 2d 223, 228 (Ala. 1996), overruled
on other grounds by White Sands Grp., LLC v. PRS II, LLC, 32 So. 3d 5 (Ala. 2009)
(“a mere failure to perform a contractual obligation is not a tort”). “A tort claim
can only be asserted when the duty of reasonable care, which one owes to another
in the course of day-to-day affairs, has been breached and causes personal injury or
property damages.” McClung, 2012 U.S. Dist. LEXIS 63834, 2012 WL 1642209,
at *7 (citing Blake, 845 F. Supp. 2d at 1209-10).
Page 16 of 17

Buckentin v. SunTrust Morg. Corp., 928 F. Supp. 2d 1273, 1289-90 (N.D. Ala. 2013); see also
TFO, Inc. v. Vantiv, Inc., Civ. Act. No. 1:16-cv-00971-SGC, 2017 WL 1196851, 2017 U.S. Dist.
LEXIS 48508, at *7 (N.D. Ala. Mar. 31, 2017) (finding Buckentin persuasive and dismissing
plaintiff’s claim for wantonness because it arose out of the breach of contract claim).
Accordingly, because the conduct surrounding Guaranteed’s wantonness claim is covered
by the parties’ contractual duties, Guaranteed’s motion for summary judgment in favor of its
wantonness claim is due to be DENIED as it is tied to the breach of contract claim which was
previously denied summary judgment.
V.

CONCLUSION

Accordingly, Defendant’s Motion for Summary Judgment (Doc. 44) and Plaintiff’s Motion
for Summary Judgment (Doc. 48) are both DENIED. The injunctive relief claim is DISMISSED
as MOOT. This matter will be set for a bench trial, which will address both parties’ declaratory
judgment claims, Defendant’s breach of contract counterclaim, and any damages.
DONE and ORDERED this the 6th day of March 2025.
/s/ Terry F. Moorer
TERRY F. MOORER
UNITED STATES DISTRICT JUDGE

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