Title: Wright v. Robinson
Citation: 468 So. 2d 94
Docket Number: N/A
State: Alabama
Issuer: Alabama Supreme Court
Date: February 8, 1985

468 So. 2d 94 (1985)
Emil F. WRIGHT, Jr.
v.
John A. ROBINSON III.
83-715.

Supreme Court of Alabama.
February 8, 1985.
Rehearing Denied March 29, 1985.
S. Dagnal Rowe of Cleary, Lee, Morris, Evans &amp; Rowe, Huntsville, for appellant.
*95 David H. Meginniss of Hornsby, Blankenship, Robinson &amp; Meginniss, Huntsville, for appellee.
FAULKNER, Justice.
This is an appeal from a summary judgment entered against Dr. Emil Wright, Jr., and in favor of John A. Robinson III.
Defendant Robinson, along with Ben H. Walker and James M. Dunn, Jr., was a principal stockholder and officer of RoBen, Inc. They planned a mobile home development in Auburn, Alabama, and formed a limited partnership to finance the development of the trailer park. Several investors, including the plaintiff, Dr. Wright, were sold interests in a limited partnership known as Stonegate Development, of which RoBen, Inc. was the general partner.
Dr. Wright invested $45,000.00 in Phase I of the development and received ten percent of the shares in the limited partnership. In Phase II of the development, Dr. Wright invested $5,000.00 and a letter of credit for $67,500.00. Phase II was never developed as planned, and thereafter Dr. Wright filed suit in the United States District Court for the Middle District of Alabama against RoBen, Inc. and the principal stockholders, including Robinson.
While the federal suit was pending, the parties entered into a settlement agreement. The agreement, signed on June 8, 1978, provided, inter alia, that the federal lawsuit would be dismissed, without prejudice, and, in return, RoBen and its shareholders, individually, would purchase the limited partners' interests in Phase II of Stonegate Park Ltd. (including Dr. Wright's). Paragraph 9 of the agreement also provided:
The consent judgment, Exhibit F, is set forth in pertinent part as follows:
Approximately two and one-half years after the settlement agreement was entered into, the RoBen shareholders notified Dr. Wright that the mortgage on the mobile home park was in arrears and that foreclosure was imminent. To prevent foreclosure, RoBen and its individual shareholders, including Robinson, agreed to relinquish their rights in the limited partnership (Phase I, Stonegate Park), if Dr. Wright and the other limited partners would bail them out of the financial crisis. Accordingly, on February 14, 1981, the parties entered into another agreement, whereby the limited partners (including Dr. Wright) would release RoBen and the general partners individually from all claims against them, in exchange for title to the land formerly held by RoBen, Inc. The release agreement expressly excepted the claim underlying Exhibit F, the consent judgment, as follows:
Dr. Wright was never repaid his $5,000.00 and the letter of credit was never returned and was ultimately called by the bank. Dr. Wright then instituted the instant suit in the Circuit Court of Madison County, Alabama, against RoBen, Inc., and the principals and officers individually. He alleged that the defendants had defaulted on paragraph 9 of the 1978 "Settlement Agreement" and asked the court to enter judgment in his favor as set forth in the consent judgment. The complaint was later amended to also include a breach of contract claim. Defendants Walker and *97 Dunn thereafter filed a suggestion of bankruptcy, leaving Robinson as the only viable defendant.
Robinson moved for summary judgment based upon the alleged illegality of the consent judgment. The trial court found that Exhibit F, the consent judgment, was in reality a confession of judgment and accordingly held:
Dr. Wright appeals from the trial court's grant of summary judgment, claiming:
On appeal from a trial court's grant of summary judgment, this court must apply the same standard used by the trial court when ruling on the motion. Alabama Power Co. v. Blount Brothers Corp., 445 So. 2d 250 (Ala.1983). In Jehle-Slauson Construction Co. v. Hood-Rich, Architects and Consulting Engineers, 435 So. 2d 716 (Ala.1983), we summarized the standard as follows:
Id. at 718.
Initially, we agree with the trial court that Exhibit F, entitled "Consent Judgment," was, in reality, an agreement to confess judgment and was therefore void as a matter of law. Although the agreement of the parties was contractual in nature, it was never acknowledged or sanctioned by any court. Additionally, the agreement provided that it was not to be recorded in the county probate office or in any other state or federal public office. Moreover, the agreement called for Dr. Wright to designate any attorney at law to appear for defendants and to confess judgment against defendants without notice or service of process of any kind.
It is well settled that, in Alabama, agreements to confess judgment are void as against public policy. Section 8-9-11, Alabama Code (1975), sets forth the rule as follows:
In Fugazzoto v. Brookwood One, 295 Ala. 169, 325 So. 2d 161 (1976), this court noted:
Id. 295 Ala. at 173, 325 So. 2d  at 163.
The existence of a void provision for a confession of judgment, however, does not render an entire agreement void but simply invalidates the unauthorized provision as to confessing judgment. Sales-Davis Co. v. Henderson-Boyd Lumber Co., 193 Ala. 166, 172, 69 So. 527, 529 (1915):
193 Ala. at 172, 69 So.  at 529.
In the instant case, the confession of judgment provision, had it been valid, would have allowed Dr. Wright to go into court and recover under the contract without the necessity of process and a full trial. Since the clause in question is void as a matter of law, we must then construe the 1978 "Settlement Agreement" without the void confession of judgment provision. What remains is a valid and enforceable contract, which, by certain of its terms, sets forth defendants' promise to repay Dr. Wright's $5,000.00 and to return his $67,500.00 letter of credit.
The provision allowing for the confession of judgment did not set forth the claim itself, but only the method by which to enforce the claim. The method set forth was not an exclusive remedy in the event of default and did not preclude alternate remedies by suit. See Sales-Davis Co. v. Henderson-Boyd Lumber Co., supra, 193 Ala. at 173, 69 So.  at 530. Since the only method of enforcement is void, the underlying breach of contract claim is preserved, but it is no longer "confessed to." Instead, Dr. Wright will have to prove at trial that a breach of contract has occurred.
Robinson, however, argues that the rules set forth in Sales-Davis, supra, are inapplicable in the instant case because, since the consent judgment marked "Exhibit F" is void as a confession of judgment and since the 1981 agreement released the breach of contract claim, there remains no other claim upon which relief could be granted. He argues that the clear language of the agreement released him from all claims except the void confession of judgment. We disagree. In Alabama Power Co. v. Blount Construction Corp., 445 So. 2d 250 (Ala.1983), this Court, in attempting to discern the meaning of a release agreement, set forth the standard as follows:
Id. at 252.
It is evident from the language of the release that the parties intended to preserve the claim for $72,500.00. However, it remains a question of fact, due to the apparent ambiguities in the release itself, whether that claim was properly preserved. The problem arises because, although, as previously discussed, the breach of contract claim would be preserved under the language "except the claim ... as agreed and consented to in that certain consent judgment ...," if read in light of the next phase, "as to the claims asserted in count four of Civil Action 78-31-E, United States District Court for the Middle District of Alabama, for the sum of $72,500.00," the ordinary language becomes ambiguous.
Whether the release agreement only preserves the federal claim or whether the breach of contract claim was properly excepted are questions of fact to be resolved by a jury. Accordingly, we find that summary judgment was improperly granted, and we therefore reverse and remand.
REVERSED AND REMANDED.
JONES, ALMON, EMBRY and ADAMS, JJ., concur.