Title: Alabama Psychiatric Services, P.C. v. 412 South Court Street, LLC.

State: alabama

Issuer: Alabama Supreme Court

Document:

REL: 09/30/2011
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
229-0649), of any typographical or other errors, in order that corrections may be made
before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
 SPECIAL TERM, 2011
_________________________
1100023
_________________________
Alabama Psychiatric Services, P.C.
v.
412 South Court Street, LLC
Appeal from Lauderdale Circuit Court
(CV-08-128)
MALONE, Chief Justice.
Alabama Psychiatric Services, P.C. ("APS"), appeals from
a summary judgment entered by the Lauderdale Circuit Court in
favor of 412 South Court Street, LLC ("Court Street").  We
reverse and remand.
1100023
This is an appeal from a summary judgment.  Therefore,
1
where the evidence in the record is conflicting, we have set
forth the facts in the light most favorable to APS.  See Dow
v. Alabama Democratic Party, 897 So. 2d 1035, 1038 (Ala. 2004)
(noting that, in reviewing a summary judgment, the Supreme
Court "must review the evidence in the light most favorable to
the nonmovant").
2
Facts
The evidence in the record, either undisputed or viewed
in the light most favorable to APS, is substantially as
follows.   In May 2005, SRS Group, LLC, which was owned by
1
Eugene Sak, acquired a building at 412 South Court Street in
Florence 
("the 
building"). 
 
Subsequently, 
Sak 
began
substantial renovations to the building, including gutting and
rebuilding the interior of the structure.
The building had two entrances.  The main entrance to the
building was in the rear of the building, adjacent to a
parking lot that was used by employees and clients of the
tenants of the building.  In addition, the building had an
entrance in front, but the front entrance was difficult to
access from the parking lot.  The route from the parking lot
to the front entrance required one to walk around one side of
the building across property belonging to a gas station and
then to jump from a retaining wall. Alternatively, one could
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3
walk around the other side of the building from the parking
lot to the front entrance, across property belonging to a
hotel, along a route that several witnesses described as
unsafe and "dangerous."  Sak testified that he personally used
the entrance in the rear of the building because "the parking
lot is oriented to that area ... so it would make common sense
to use that as an entrance."
In May 2006, Sak entered into negotiations with Make
Believe, LLC, to lease space in the building for use as a gym
and exercise facility. They reached an agreement pursuant to
which Make Believe would lease the first and second floors of
the building, including the first and second floors of an
addition that would subsequently be built onto the main
entrance in the rear of the building.  According to Sak, he
and Make Believe negotiated Make Believe's entire lease for
all this space at one time, before Make Believe took
occupancy.  Make Believe took occupancy of the first and
second floors of the building in December 2006, and by January
2007 it had begun operating a gym known as the Metro Athletic
Club or "the MAC."  According to Sak, in January 2007, all of
Make Believe's rental space was physically completed except
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4
for that portion of Make Believe's leased space that would be
located in the addition.
In May 2006, while he was negotiating with Make Believe,
Sak entered into discussions with APS about leasing office
space in the building.  Sak knew that APS would be leasing the
space to provide psychiatric and mental-health-counseling
services to patients.
During the negotiations with Sak for the space APS was
considering leasing, Doyle Stewart, APS's chief financial
officer,  and other officers and employees of APS asked Sak
for information about the other tenants in the building,
including the MAC. Stewart thought it unusual that a gym would
be operating in a professional building.  According to
Stewart, in answer to his inquiries about the MAC, Sak
portrayed the MAC as a small, expensive gym with "not a
significant 
membership 
load." 
 
During 
the 
ongoing 
negotiations
between APS and Sak, the entrance to the MAC was located
directly behind the elevators in what was then the main
entrance area of the building.  According to Stewart, he noted
at that time that the entrance to the MAC and the gym facility
itself were located so that they "would not cause a problem
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5
for anybody that wanted to go into the upper floors of the
building.  It was kind of off to itself."
During his deposition, Stewart testified that, during the
course of the lease negotiations, he "spent a lot of time"
explaining to Sak that "a lot of [APS's patients] are VIP-type
people ... leaders in the community that come in for
psychiatric services, and we have to keep their business,
basically, confidential ... and private to the best extent
that we can."  Stewart and other representatives of APS
informed Sak that APS's clients were psychiatric patients and
that those clients would need to be able to enter the building
and pass through the common areas with sufficient privacy that
their destination at APS's offices was not readily obvious to
bystanders.  
Stewart knew that Sak was planning to build an addition
to the building at the main entrance.  During the
negotiations, Stewart inquired as to Sak's plans for the
addition.  In response to those inquiries and to the inquiries
of other APS personnel, Sak represented that the addition
would include an atrium with a sitting area and a fountain
accessible by a walled-in hallway.  Sak represented to APS
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6
that the walled-in hallway would lead from the door of the
main entrance to the building elevators, which could be used
to access the various tenant spaces on the several floors of
the building.  Sak represented that the enclosed hallway would
contain a directory or directions to the various tenant spaces
in the building.  At no point in response to APS's repeated
inquiries did Sak represent that Make Believe would be leasing
space in the addition for use as a gym or that, when the
addition was finished, APS's patients would have to walk
through Make Believe's gym to access the elevators to reach
APS's offices.
During the negotiations, Mary Brown, an office manager
for APS, told Sak that she was concerned about having a
discreet entrance for APS's clients and about potential noise
from a gym facility in the building and that there would not
be sufficient parking for APS patients and staff because of
the use of the parking lot by members of the gym.  Sak assured
Brown that the noise problem would be solved with extra
insulation, that parking would be sufficient for both the gym
members and APS, that he would assign APS 30 of the 120
available parking spaces if necessary, and that, when
1100023
7
construction of the addition was complete, the gym would have
its own separate entrance.  Sak also assured Brown that the
addition would house an atrium or other common areas and that
the entrance to the building in the addition would lead into
an enclosed common hallway that led to the building elevators.
Stewart and Brown both believed Sak's representations
that the addition would include a main entrance into an
enclosed hallway that led to the building elevators, and they
both thought that this would provide a sufficiently discreet
entrance for APS's clients.  They both were involved in the
lease negotiations between APS and Sak, and they testified
that, had APS known that the entrance to the addition would be
into an open gymnasium through which APS's clients would have
to walk to reach the elevators, they would not have signed a
lease agreement for the property because such an entrance
would 
not be sufficiently discreet or 
adequate 
for psychiatric
patients who had to access the elevators to get to APS's
office space on the third floor.
On October 19, 2006, APS entered into a lease agreement
with SRS Group, LLC, pursuant to which APS agreed to lease
office space on the third floor of the building.  After
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8
October 19, 2006, Stewart, Brown, and APS continued to ask Sak
for specifics about the plans for the addition.  Sak continued
to represent that the addition would include a walled hallway
from the main entrance to the elevators with space for common
use on either side and that APS would be satisfied with the
main entrance after the addition was complete. 
Sometime in 2007, the building was sold to Court Street,
of which Sak was a member.  On May 31, 2007, Court Street and
APS executed a five-year lease agreement for the third floor
of the building.  The May 31, 2007, lease agreement stated
that it "st[ood] as an amendment to and replacement of" the
October 19, 2006, lease agreement that named SRS Group as
landlord.
Although the renovation construction was not yet
complete, Sak asked APS if it would be willing to move into
its office space early so that he would be able to obtain
financing to complete the renovations.  APS complied and took
possession of the leased space in June 2007.  Construction on
the addition started in August 2007.  From time to time during
construction, Sak represented to APS that he was changing the
details of his plans for the addition or that the plans were
1100023
9
not complete or definite.  However, in response to repeated
inquiries from APS, he always represented that the addition
would consist of an enclosed hallway leading from the main
entrance of the building to the elevators, with some type of
common area off to the side of the enclosed hallway.  Sak also
continued to represent that the new entrance would be adequate
and appropriate for use by APS's clients. 
In September or October 2007, the new addition was
completed.  Make Believe moved into the new addition pursuant
to its lease and began operating a Gold's Gym franchise in the
space.  The Gold's Gym facility was not a small, exclusive gym
for professionals.  It had many more customers than the MAC,
and the customers made more noise and used more parking spaces
than had the MAC's members.  As a result, the clients of APS
had difficulty finding available parking spaces.  The noise
from the gym interfered with APS's business.  For example,
noise and vibrations caused by activities in the gym would
regularly cause coffee cups to shake in APS's office space.
At one point, an APS patient thought she was having a
psychotic episode and that she was hearing noises that did not
exist, but APS professionals, with some difficulty, were able
1100023
10
to reassure her that she was not having a psychotic episode
and that she was in fact hearing actual noises that were
coming from the gym. 
It was not until the addition was complete and Make
Believe began operating a Gold's Gym franchise in it that APS
discovered that Make Believe would occupy the addition and
that APS's clients entering the building at the main entrance
would have to traverse an open walkway through the Gold's Gym
facility to access the elevators to APS's offices.  The
addition did not have an enclosed hallway.  The main entrance
to the building through the addition appeared from the outside
to be nothing more than an entrance to the Gold's Gym
facility.  Clients of APS had difficulty finding their way to
APS's office because they did not recognize the Gold's Gym
entrance as a common entrance to the building.  Further,
because the addition did not contain an enclosed hallway, once
patients of APS entered the building they had to walk through
the Gold's Gym facility along an open walkway to the
elevators.  On either side of the walkway, members of Gold's
Gym were exercising and using tanning beds.  Members of Gold's
Gym who were exercising at various places throughout the new
1100023
11
addition could easily view APS's clients as they walked to the
elevators.  One witness described the walkway through the
addition from the entrance to the elevators as follows:
"There may be some railings in there [along the
walkway from the main entrance to the elevator], but
everything is wide open.  I mean, you can see.  You
know, you can see everything going on in the gym. As
a matter of fact, the gym people look[ed] at you
when you walked in.  I noticed that, which is kind
of uncomfortable, but you know, they are there doing
their bikes and stuff, facing the -- path to the
elevator.
"There really is, I mean, the whole thing is the
gym.  I mean, everything.  The left side, everything
over there is on  the gym.  The right, everything is
on the gym.  The receptionist's desk [for Gold's
Gym] is right there when you walk in the door.  I
mean, the whole thing is the gym."
Further, employees of Gold's Gym would sometimes stop
APS's clients in front of people in the gym and demand to know
where they were going.  The APS patients would inform them
that they were in the building for an appointment at APS, and
the gym staff would then direct them to the elevators.  APS,
through Sak, asked the Gold's Gym employees to stop accosting
visitors to the building and demanding to know where they were
going, and to simply direct persons who were not clientele of
Gold's Gym to the elevator.  Stewart testified that the
manager of Gold's Gym responded that he could not "staff the
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12
front to be a reception area" for everyone entering the
building, and the manager complained to APS that he "was tired
of [APS's] crazy patients walking through his gym."
APS presented evidence indicating that its patients were
embarrassed and humiliated because they had to walk through
the gym, where they could possibly be seen by family, friends,
and coworkers; that many patients refused to come back to the
building after having to walk through the gym to reach APS's
offices; and that new patients refused to make appointments
when they learned that the office was in a building occupied
by Gold's Gym and that they would have to walk through the gym
to reach APS's offices. 
When asked in a deposition whether APS's clients could
have used the front entrance to the building, Stewart
explained that there were no available parking spaces from
which the front entrance was accessible.  Stewart stated that
that he could not ask psychiatric patients to "jump off a
retaining wall" or walk through a dangerous alley as would be
required to access the front entrance from the parking area in
the rear of the building.  Stewart testified that the front
1100023
Paragraph 18.1 of the May 31, 2007, lease agreement
2
between Court Street and APS states:
"In the event of any alleged default in the
obligations of Landlord under this Lease, Tenant
will deliver to Landlord written notice to cure such
alleged default or, in the event the alleged default
cannot reasonably be cured within a 30-day period,
to commence action and proceed diligently to cure
such alleged default."
13
entrance was occasionally locked or under construction.
Stewart stated:
"You know, psychiatric patients run from very mild
to very, very sick.  And, you know, they have all
kinds of things, become paranoid about stuff and
things, and having them walking around an alley [to
access the front entrance from the parking lot] is
not -- not -- will not work.  That is just not going
to 
work, 
and, 
as 
a 
matter 
of 
fact, 
it's
inappropriate for anybody to have to walk down an
alley to get to the front door of a Class A office
building."
On January 22, 2008, APS sent Sak a letter stating:
"Be advised that [APS] has determined that you are
currently in default of your obligation to [APS] as
set forth in our Lease executed May 31, 2007.
Accordingly, pursuant to paragraph 18.1 of the
lease, i.e., Notice of Landlord's Default,
 this
[2]
letter is written notice of our intent to terminate
the Lease.  The reasons for our actions include, but
are not necessarily limited to, your failure to
provide unimpeded confidential access to the office
space; your authorization, facilitation or operation
of a business which operates as a nuisance to our
leased space; and your failure to provide adequate
on site parking for our personnel and patients.  For
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14
these reasons, your acts and/or omissions constitute
a breach of your covenant not to interfere in our
quiet enjoyment of the leased property. Accordingly,
we request that you undertake all obligations
required 
by 
you 
as 
set 
forth 
in 
the 
Lease
agreement."
On February 5, 2008, APS entered into a lease agreement
for office space in another building.  On February 11, 2008,
counsel for Court Street sent a letter to counsel for APS
denying that Court Street was in breach of the lease
agreement.  On March 24, 2008, counsel for Court Street sent
another letter to counsel for APS, detailing the steps Court
Street was taking to address APS's concerns, which included
ordering "[a]rchitecturally designed fabric shields ... to
block patrons view from adjoining tenant space."  However, the
letter also stated that Court Street still denied that it was
in breach of the lease agreement. 
On March 31, 2008, APS gave Court Street notice that it
was vacating the premises effective April 1, 2008, and
returned the keys to its offices to Sak.  
Procedural History
On April 21, 2008 Court Street sued APS, alleging breach
of the contract and seeking all rents due under the lease
agreement.  According to Court Street, APS breached the terms
1100023
15
of the lease agreement when it vacated the premises and ceased
paying rent without giving Court Street 90 days' written
notice of default and an opportunity to cure any alleged
default.
On May 20, 2008, APS filed an answer and counterclaim, in
which it asserted that Court Street was in breach of the lease
agreement because, APS alleged, Court Street interfered with
APS's beneficial use and quiet enjoyment of the premises in
violation of the terms of the lease agreement, and in doing so
had breached an implied warranty of quiet enjoyment.  APS also
claimed that it had been fraudulently induced into entering
into the lease agreement by Court Street's representations
that the premises would be appropriate and satisfactory for
APS's psychiatric practice; that, at the time it made the
representations, Court Street knew that the representations
were false and knew that the addition would house an exercise
facility in such a manner as would interfere with APS's use of
its leased space; that Court Street had suppressed information
regarding a future tenant; and that Court Street's false
representations and suppression of material information were
willful, fraudulent, deceptive, and made to induce it into
1100023
16
executing the lease agreement.  APS sought an order rescinding
and canceling the lease, compensatory damages, and punitive
damages.  
On August 6, 2010, Court Street filed a motion for a
summary judgment as to all claims.   On August 30, 2010, APS
filed a response to Court Street's summary-judgment motion and
a cross-motion for a summary judgment.  On September 7, 2010,
the trial court granted Court Street's motion for a summary
judgment and entered a judgment against APS in the amount of
$436,502.26.  On October 5, 2010, APS filed a notice of
appeal.
Standard of Review
"This Court's review of a summary judgment is de
novo. Williams v. State Farm Mut. Auto. Ins. Co.,
886 So. 2d 72, 74 (Ala. 2003). We apply the same
standard of review as the trial court applied.
Specifically, we must determine whether the movant
has made a prima facie showing that no genuine issue
of material fact exists and that the movant is
entitled to a judgment as a matter of law. Rule
56(c), Ala. R. Civ. P.; Blue Cross & Blue Shield of
Alabama v. Hodurski, 899 So. 2d 949, 952-53 (Ala.
2004). In making such a determination, we must
review the evidence in the light most favorable to
the nonmovant. Wilson v. Brown, 496 So. 2d 756, 758
(Ala. 1986). Once the movant makes a prima facie
showing that there is no genuine issue of material
fact, the burden then shifts to the nonmovant to
produce 'substantial evidence' as to the existence
of a genuine issue of material fact. Bass v.
1100023
17
SouthTrust Bank of Baldwin County, 538 So. 2d 794,
797-98 (Ala. 1989); Ala. Code 1975, § 12-21-12."
Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038 (Ala.
2004).
Discussion
On appeal, APS argues that the trial court erred by
entering a summary judgment for Court Street.  Specifically,
APS contends that it was fraudulently induced to sign a lease
agreement for space in the building.  APS argues that the
record contains substantial evidence creating a genuine issue
of material fact as to whether Court Street knowingly
misrepresented to APS that the addition would be built as a
common area with a sufficiently discreet and appropriate main
entrance to the building for APS's clients while suppressing
the fact that the space in the addition had already been
leased to Make Believe for use as a gym.
APS argues that the summary judgment was inappropriate
because, APS contends, the record contains substantial
evidence to support its claim that Sak fraudulently induced it
to enter into the May 31, 2007, lease agreement with Court
Street 
by 
misrepresenting 
and 
suppressing 
material
information.  
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18
The elements of fraudulent misrepresentation are: "'(1)
[a] false representation (2) of a material existing fact (3)
relied upon by the plaintiff (4) who was damaged as a
proximate result of the misrepresentation.  Earnest v.
Prichett-Moore, Inc., 401 So. 2d 752 (Ala. 1981).'"  Pranzo v.
ITEC, Inc., 521 So. 2d 983, 984 (Ala. 1988) (quoting Coastal
Concrete Co. v. Patterson, 503 So. 2d 824, 826 (Ala. 1987)).
When, as in this case, "'fraud is based upon a promise to
perform or abstain from performing in the future, two
additional elements must be proved: (1) the defendant's
intention, at the time of the alleged misrepresentation, not
to do the act promised, coupled with (2) an intent to deceive.
Clanton v. Bains Oil Co., 417 So. 2d 149 (Ala. 1982).'"
Pranzo, 521 So. 2d at 983 (quoting Coastal Concrete, 503 So.
2d at 826).
The elements of fraudulent suppression are: "(1) the
defendant had a duty to disclose an existing material fact;
(2) the defendant concealed or suppressed that material fact;
(3) the defendant's suppression induced the plaintiff to act
or refrain from acting; and (4) the plaintiff suffered actual
damage as a proximate result. Freightliner, LLC v. Whatley
1100023
19
Contract Carriers, LLC, 932 So.2d 883, 891 (Ala.2005)."
Coilplus-Alabama, Inc. v. Vann, 53 So. 3d 898, 909 (Ala.
2010).  "'[A]n action for suppression will lie only if the
defendant actually knows the fact alleged to be suppressed.'"
Cook's Pest Control, Inc. v. Rebar, 28 So. 3d 716, 726 (Ala.
2009) (quoting McGarry v. Flournoy, 624 So. 2d 1359, 1362
(Ala. 1993)).
The record contains evidence indicating that in May 2006
Sak began negotiations with Make Believe to lease space in the
building to be used by Make Believe as a gym; that the lease
agreement included an agreement whereby Make Believe would
lease not only space in the existing building but also space
in an addition that would be built onto the then existing main
entrance to the building; and that SRS Group and Make Believe
entered into a lease agreement for all this space at one time,
before Make Believe took occupancy of the building in December
2006.  One could reasonably conclude from this evidence that
Sak, who was a principal in SRS Group and in Court Street,
knew at least by December 2006 that Make Believe would be
leasing the addition and would be operating a gym in it.  See
Coilplus-Alabama, 53 So. 3d at 909 ("'"An action for
1100023
20
suppression will lie only if the defendant actually knows the
fact alleged to be suppressed."'  Cook's Pest Control, Inc. v.
Rebar, 28 So. 3d 716, 726 (Ala. 2009) (quoting McGarry v.
Flournoy, 624 So. 2d 1359, 1362 (Ala. 1993)).").
According to the depositions of several witnesses, APS
communicated to Sak the importance to APS of a discreet
entrance, as well as the importance of maintaining a
reasonable degree of privacy for its clients.  The record
contains evidence indicating that, on multiple occasions both
before and after December 2006 when Make Believe moved into
the building, and before APS entered into its May 31, 2007,
lease agreement with Court Street, APS asked Sak to explain
his plans for the addition to the main entrance.  See Mason v.
Chrysler Corp., 653 So. 2d 951, 954 (Ala. 1995) ("A duty to
communicate can arise from a confidential relationship between
the plaintiff and the defendant, from the particular
circumstances of the case, or from a request for information,
but mere silence in the absence of a duty to disclose is not
fraudulent." (emphasis added)).
The record contains evidence to support the conclusion
that, in response to repeated inquiries from APS, Sak
1100023
21
represented that the addition to the main entrance would
include a discreet entrance that would be appropriate for use
by APS's clients and that this entrance would consist of an
enclosed hallway leading to the elevators, with spaces for
common use on either side of the hallway.  However, the
evidence also demonstrates that, before he made these
representations to APS, Sak knew that the space in the
addition had already been leased to Make Believe for the
purpose of operating a gym.  Thus, one could reasonably
conclude from the evidence that, at the time he made
representations to APS regarding the nature of the addition,
Sak in fact had no intention of building an addition that
consisted of a main entrance into a walled-in hallway to the
elevators with doorways to common areas opening off the
hallway on either side.  See Hillcrest Ctr., Inc. v. Rone, 711
So. 2d 901, 906 (Ala. 1997) (holding that, for an action for
fraudulent 
misrepresentation 
to 
lie 
"'[w]here 
the
misrepresentation relates to some future event, it must be
shown that the person making the representation intended not
to do the act promised at the time the misrepresentation was
1100023
22
made.'" (quoting Russellville Prod. Credit Ass'n v. Frost, 484
So. 2d 1084, 1087 (Ala. 1986))).
The record contains evidence indicating that, to conduct
its business as a psychiatric practice, APS required a
building entrance that was usable by psychiatric and mental-
health patients and that was sufficiently discreet that
clients of APS could not be readily identified as psychiatric
patients as they entered the building.  The evidence also
indicates that APS made these needs known to Sak.  The record
contains 
evidence 
indicating 
that, 
contrary 
to 
Sak's
representations to APS, both floors of the addition had been
leased by Make Believe and the addition did not contain common
space on either side of a walled-in hallway leading from the
main entrance to the elevators.  See Pranzo, supra (holding
that a claim of fraudulent misrepresentation requires proof
that the defendant misrepresented a material fact); and
Coilplus-Alabama, supra (holding that a claim of fraudulent
suppression requires proof that the defendant suppressed a
material fact).
The 
record 
contains 
evidence 
indicating 
that 
the
addition, which was a gym and did not have common space on
1100023
23
either side of a walled-in hallway, did not have an entrance
that was usable by APS's clients and was not sufficiently
discreet for APS's clients.  As a result, according to
witnesses for APS, APS lost clients and revenue because its
patients refused to keep appointments when they learned they
had to walk through the gym to reach APS's offices.
See Pranzo, supra (holding that a claim of fraudulent
misrepresentation requires proof that the plaintiff suffered
damage as a result of reliance on the misrepresentation); and
Coilplus-Alabama, supra (holding that a claim of fraudulent
suppression requires proof that the plaintiff suffered damage
as a proximate result of the suppression).
The record contains the depositions of two witnesses who
testified as representatives of APS, and who both testified
that APS would not have entered into the May 31, 2007, lease
agreement with Court Street if it had known that, instead of
common space and a walled hallway connecting the main entrance
to the elevators, Sak intended, in constructing the addition,
to construct space that Make Believe had already leased for
use as a gym. See Pranzo, supra (holding that a claim of
fraudulent 
misrepresentation 
requires 
proof 
that 
the 
plaintiff
1100023
24
relied on the misrepresentation); and Coilplus-Alabama, supra
(holding that a claim of fraudulent suppression requires proof
that the plaintiff acted or failed to act as a result of the
suppression). 
Thus, the record contains substantial evidence to support
APS's claim that there exists a genuine issue of material fact
as to whether, through misrepresentation and the suppression
of material facts, Sak fraudulently induced APS to enter into
the May 31, 2007, lease agreement.  Accordingly, the trial
court erred in entering a summary judgment for Court Street on
APS's counterclaim of fraudulent inducement.
Court Street apparently takes the position that, because
APS entered into a lease agreement with SRS Group on October
19, 2006, any fraudulent misrepresentations or suppression of
information that may have occurred after October 19, 2006,
could not have proximately caused APS any harm, because APS
had already entered into the lease agreement.
The record does not contain evidence of the terms of the
agreement by which SRS Group transferred its interest in the
building to Court Street.  The record also does not contain a
copy of the October 19, 2006, lease agreement between APS and
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25
SRS Group.  It is undisputed that APS and Court Street entered
into a separate lease agreement on May 31, 2007, a copy of
which is contained in the record.  Sak testified that the May
31, 2007, lease agreement between APS and Court Street was
"the same lease" as the October 19, 2006, lease, but with a
change in the name of the landlord.  This Court notes that the
May 31, 2007, lease provides that the "[l]andlord may assign
all of its right, title, and interest under this lease upon
thirty (30) days notice to [t]enant."
In sum, the record contains no substantial evidence, and
the parties presented no argument, as to whether APS would
have been bound by the October 19, 2006, lease agreement after
SRS Group sold its interest in the building to Court Street,
regardless of whether APS had entered into a separate lease
agreement with Court Street on May 31, 2007.  Therefore,
summary judgment is not appropriate on the basis of Court
Street's 
implied 
argument 
that 
any 
fraudulent
misrepresentation or suppression that occurred after October
19, 2006, could not have proximately caused APS any harm.  See
Liberty Nat'l Life Ins. Co. v. University of Alabama Health
Servs. Found., P.C., 881 So. 2d 1013, 1020 (Ala. 2003)
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("[T]his Court will affirm the trial court on any valid legal
ground presented by the record, regardless of whether that
ground was considered ... by the trial court. Ex parte Ryals,
773 So. 2d 1011 (Ala. 2000), citing Ex parte Wiginton, 743 So.
2d 1071 (Ala. 1999), and Smith v. Equifax Servs., Inc., 537
So. 2d 463 (Ala. 1988). This rule fails in application only
where due-process constraints require some notice at the trial
level, which was omitted, of the basis that would otherwise
support an affirmance, such as ... where a summary-judgment
movant has not asserted before the trial court a failure of
the nonmovant's evidence on an element of a claim or defense
and therefore has not shifted the burden of producing
substantial evidence in support of that element, Rector v.
Better Houses, Inc., 820 So. 2d 75, 80 (Ala. 2001) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548,
91 L. Ed. 2d 265 (1986), and Kennedy v. Western Sizzlin Corp.,
857 So.2d 71 (Ala. 2003))." (emphasis added)).
Conclusion
For the reasons stated above, we reverse the judgment of
the trial court and remand the case for further proceedings
consistent with this opinion.
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REVERSED AND REMANDED.
Woodall, Stuart, Parker, and Main, JJ., concur.
Murdock and Shaw, JJ., concur in the result.
Wise, J., recuses herself.