Title: Kelmor, LLC, James S. Pace, and Melvin Zimmerman v. Alabama Dynamics, Inc. and Gene Ernest
Citation: N/A
Docket Number: 1050479
State: Alabama
Issuer: Alabama Supreme Court
Date: April 3, 2009

This case was originally assigned to another Justice on
1
this Court; it was reassigned to Chief Justice Cobb.
Rel 04/03/2009
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
 OCTOBER TERM, 2008-2009
_________________________
1050479
_________________________
Kelmor, LLC, James S. Pace, and Melvin Zimmerman
v.
Alabama Dynamics, Inc., and Gene Ernest
Appeal from Shelby Circuit Court
(CV-02-1171)
COBB, Chief Justice.1
Kelmor, LLC, James S. Pace, and Melvin Zimmerman, the
plaintiffs in a breach-of-contract action in the Shelby
Circuit Court, appeal from a summary judgment in favor of the
1050479
2
defendants, Alabama Dynamics, Inc., and Gene Ernest.  We
affirm.
I.  Factual and Procedural History
Ernest owns Alabama Dynamics, Inc., an industrial
manufacturing and fabrication business located in Calera.  In
early 2001, Ernest decided to sell the business he had started
nearly 30 years earlier.  He hired John Clark of an entity
known as Business Resources to locate a buyer for his company.
Soon thereafter Clark presented Zimmerman as a potential
buyer.  On February 21, 2001, Zimmerman presented Ernest with
a letter of intent regarding the purchase of Alabama Dynamics.
The letter of intent stated that the closing of the
transaction would occur on or before April 30, 2001.  The
letter of intent also stated that the letter of intent would
expire on April 30, 2001, if the transaction was not
consummated by that date.  After realizing that the
transaction would not be consummated by April 30, 2001,
because of problems in securing financing for the purchase,
Zimmerman presented Ernest with another letter of intent on
April 11, 2001.  This second letter of intent provided that
Ernest would discontinue any discussion with any party other
1050479
3
than Zimmerman for the sale of the company and its assets
until the closing date in the letter, May 31, 2001.  On June
4, 2001, Zimmerman's attorney wrote Ernest's attorney asking
that the closing date be extended to June 30, 2001.  The
following day Ernest's attorney wrote Zimmerman's attorney
stating that Ernest had agreed to extend the closing date to
June 30, 2001.  
The sale of Alabama Dynamics did not close by June 30,
2001, again because of problems in securing financing.  In
July 2001, a "Sale of Assets Agreement" was executed between
Alabama Dynamics and Ernest, as the sellers, and Zimmerman
Acquisition, Inc., and Zimmerman, as the purchasers.  The
agreement provided that the closing would occur on August 31,
2001.  Once again, that deadline passed without the closing of
the transaction.  
In June 2002, Zimmerman, his business partner Pace, and
Kelmor, LLC, a limited liability corporation owned by
Zimmerman and Pace (hereinafter referred to collectively as
"Kelmor"), entered into another asset-purchase agreement with
Ernest and Alabama Dynamics ("the asset-purchase agreement").
1050479
4
The 
asset-purchase 
agreement 
contained 
the 
following 
pertinent
provisions:
"1.  SALE OF ASSETS AND PURCHASE PRICE.
"....
"(c) Purchase Price Adjustment: Seller and
Purchaser 
shall 
jointly 
perform 
an
examination of Seller[']s balance sheet as
of Date of Closing and the Purchase Price
shall be adjusted to reflect any changes
therein since June 30, 2002.  Any increase
or decrease in total assets, excluding
plant and equipment, and total liabilities
shall be reflected by an identical change
in the total purchase price and the amount
of cash due at closing.  All items are to
be accounted for in accordance with
Generally Accepted Accounting Principles
(GAAP), consistently applied.
"....
"2.  CLOSING AND PRORATIONS.
"(a) The purchase and sale contemplated
hereunder shall be closed on June __, 2002.
The closing shall take place at the offices
of 
Kracke, 
Thompson 
and 
Ellis 
in
Birmingham, Alabama.
"....
"12.  MISCELLANEOUS PROVISIONS.
"....
"(f) Time is of the Essence: Time is of the
essence of this Agreement."
1050479
5
Although the asset-purchase agreement called for the
closing of the sale to take place "on June __, 2002," the sale
was not completed by June 30, 2002.  The record indicates that
Kelmor was unable to obtain financing before June 30, 2002. 
On July 23, 2002, Ernest and Alabama Dynamics' attorney
sent a letter to Kelmor's financier, which stated, in
pertinent part:
"This letter will serve as confirmation that
Alabama Dynamics, Inc. has sufficient and available
funds to pay the  closing costs of the Purchaser,
Kelmor, LLC, on the referenced transaction.  We have
been informed the closing costs will not exceed One
Hundred and Sixty Thousand Dollars ($160,000.00).
The contemplated payment of these closing costs by
Alabama Dynamics, Inc. will result in the Sale of
Assets Agreement being modified to reflect this
change in terms.
"This letter is not to be constructed or
considered to be a promise or agreement to pay the
closing costs of the Purchaser, Kelmor LLC, unless
and until each and every term and provision of the
Sale of Asset[s] Agreement referenced above has been
completely 
fulfilled. 
 
If 
for 
any 
reason,
performance contemplated by the Sale of Assets
Agreement does not occur[,] no claim can be made on
any of the assets of Alabama Dynamics, Inc. for cost
or fee incurred by you.  Any claim for reimbursement
of costs or fees due you must be made on your
borrower, Kelmor, LLC."
1050479
6
By August 21, 2002, the transaction still had not been
closed.  In a letter dated August 21, 2002, to Kelmor's
attorney, Ernest and Alabama Dynamics' attorney wrote:
"Please consider this letter as notification to
you on behalf of my clients, Alabama Dynamics, Inc.
and Gene Ernest, that unless the Sale of Assets
Agreement by and between Alabama Dynamics, Inc. and
Gene Ernest as Sellers and Kelmor, LLC and Melvin
Zimmerman and James S. Pace as Purchasers, is not
closed on or before 5:00 p.m. August 23, 2002, we
shall consider it null and void and of no force and
effect.  The Closing contemplated by the Agreement
was to take place in June 2002.
"My client has been extremely patient with the
innumerable delays which have occurred in closing
this Agreement.  Our client can no longer agree to
continued delays in Closing; therefore, please
accept this letter has [sic] notice that unless this
matter can be closed by the date set out above, we
will consider it null and void and of no force and
effect.
"If the matter does not close by the date set
out above we will instruct the Broker to forthwith
return any earnest money being held to your clients.
If you have any questions, please do not hesitate to
call me."
Kelmor did not respond to the letter, and the sale did not
close on August 23, 2002.  
On September 5, 2002, Zimmerman and Pace, along with a
third individual, arrived at the premises of Alabama Dynamics
1050479
Kelmor now argues on appeal that the performance of an
2
environmental study before closing was the responsibility of
Ernest and Alabama Dynamics.  The asset-purchase agreement,
however, states that "an environmental audit of the Property
satisfactory to Purchaser in all respects" was Kelmor's
responsibility.
Business Resources' appeal was dismissed as untimely
3
filed.  Business Resources v. Alabama Dynamics, Inc. (No.
7
to conduct an environmental study.   Zimmerman and Pace
2
contend that they had contacted Clark to arrange the visit,
who in turn had told Ernest's wife that they would be visiting
the 
premises; 
Ernest, 
however, 
alleges 
they 
arrived
unannounced.  Upon their arrival, Ernest informed Zimmerman
and Pace that the sale would not occur and ordered them off
the property.  
On September 18, 2002, Kelmor sued Ernest and Alabama
Dynamics, alleging breach of contract.  Business Resources
intervened in 
the 
action and also brought 
a breach-of-contract
claim against Ernest and Alabama Dynamics.  Ernest and Alabama
Dynamics moved the trial court for a summary judgment as to
Kelmor's breach-of-contract claim as well as Business
Resources' breach-of-contract claim.  The trial court entered
a summary judgment for Ernest and Alabama Dynamics on all
claims.  Kelmor appeals.3
1050479
1050521, August 9, 2006).
8
II.  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.
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, 1038-39
(Ala. 2004).
III. Analysis
A.  Did the trial court enter the summary judgment before
Ernest and Alabama Dynamics filed their narrative summary of
undisputed material facts?
Much of Kelmor's brief is devoted to the argument that
Ernest and Alabama Dynamics' motion for summary judgment was
purportedly 
not 
supported by a 
narrative summary 
of 
undisputed
1050479
9
material facts and that, therefore, the summary judgment was
improper.  Rule 56(c)(1), Ala. R. Civ. P., states:
"(1) Form of Motion and Statement in Opposition
Thereto.  The motion shall be supported by a
narrative summary of what the movant contends to be
the undisputed material facts; that narrative
summary may be set forth in the motion or may be
attached as an exhibit.  The narrative summary shall
be supported by specific references to pleadings,
portions of discovery materials, or affidavits and
may include citations to legal authority.  Any
supporting documents that are not on file shall be
attached as exhibits.  If the opposing party
contends that material facts are in dispute, that
party shall file and serve a statement in opposition
supported in the same manner as is provided herein
for a summary of undisputed material facts."
The case-action summary indicates that Ernest and Alabama
Dynamics filed their summary-judgment motion on September 13,
2005, and that the trial court entered a summary judgment in
their favor on November 14, 2005.  It also indicates that
Ernest 
and 
Alabama 
Dynamics 
filed 
their 
evidentiary 
submission
in support of their summary-judgment motion on December 15,
2005, and a memorandum of law in support of their motion for
a summary judgment, containing a narrative summary of
undisputed material facts, on December 19, 2005, over a month
after the trial court had entered the summary judgment.  The
record contains two copies of Ernest and Alabama Dynamics'
1050479
Although the record contains a copy of Kelmor's brief
4
stamped as received by the circuit clerk on October 11, 2005,
the case-action summary does not contain an entry indicating
that the brief was received.
10
narrative summary of undisputed material facts and memorandum
of law in support of their motion for summary judgment, one of
which indicates that it was filed in the circuit clerk's
office on December 19, 2005; the other does not indicate that
it was received in the circuit clerk's office.  Kelmor
apparently was served with a copy of the memorandum of law and
narrative summary of undisputed facts, because on October 11,
2005, it responded to Ernest and Alabama Dynamics' arguments
in the memorandum of law in its brief in opposition to their
summary-judgment motion.   Kelmor argues that the trial court
4
could not have properly entered a summary judgment without the
submission of a narrative summary of 
undisputed 
material 
facts
by Ernest and Alabama Dynamics.  Furthermore, Kelmor argues
that ex parte communications took place between the trial
court and Ernest and Alabama Dynamics because, it reasons, the
trial court's summary-judgment order contains many of the
arguments subsequently made by Ernest and Alabama Dynamics in
1050479
11
their memorandum of law and supported by their narrative
summary of undisputed facts. 
Kelmor correctly notes that a summary-judgment motion
cannot be granted if it is not accompanied by a narrative
summary of undisputed material facts supporting the motion. 
"'A summary judgment is not proper if the movant
has not complied with the requirements of Rule 56.
Moore v. ClaimSouth, Inc., 628 So. 2d 500 (Ala.
1993); see also Thompson v. Rehabworks of Florida,
Inc., 727 So. 2d 807 (Ala. Civ. App. 1997), Hale v.
Union Foundry Co., 673 So. 2d 762 (Ala. Civ. App.
1995).  While the Rule provides that a movant may
base its motion upon the pleadings and other
documents on file with the court, it does not allow
a party to file a simplistic motion devoid of a
narrative summary and specific references to those
portions of the record demonstrating that no genuine
issue of material fact exists.'"
Borom v. Thaggard, 926 So. 2d 331, 332 (Ala. 2005) (quoting
Northwest Florida Truss, Inc. v. Baldwin County Comm'n, 782
So. 2d 274, 277 (Ala. 2000)).  Because the record indicates
that the narrative statement of undisputed material facts may
not have been before the trial court when it entered the
summary judgment, this Court on August 14, 2007, issued a
show-cause order as to why Kelmor's notice of appeal should
not be stricken as being from a void judgment.  In response to
the show-cause order, Ernest and Alabama Dynamics asserted
1050479
12
that they attempted to file their motion for a summary
judgment and the evidentiary submission and memorandum of law
containing the narrative summary on September 13, 2005.
However, the circuit clerk's office would accept only the
summary-judgment motion and instructed Ernest and Alabama
Dynamics' counsel to submit the evidentiary submission and
memorandum of law directly to the trial court.  Ernest and
Alabama Dynamics further asserted that 
they 
then 
submitted the
evidentiary submission and memorandum of law to the trial
court in open court at a hearing on September 19, 2005.
According to Ernest and Alabama Dynamics, after they learned
that Kelmor intended to appeal the summary judgment, their
counsel reviewed the online case-action summary and realized
that the case-action summary did not reflect the filing of the
memorandum of law and the evidentiary submission.  Ernest and
Alabama Dynamics then refiled the evidentiary submission and
memorandum of law with the trial court on December 15 and 19,
2005, respectively.
Unable to determine for certain from the response to our
show-cause order that Ernest and Alabama Dynamics' narrative
summary of undisputed material facts was before the trial
1050479
13
court when the summary judgment was entered, this Court on
October 25, 2007, in accordance with Rule 10(f), Ala. R. App.
P., remanded this cause for the trial court to make an entry
on 
the 
case-action 
summary 
indicating 
whether 
Alabama 
Dynamics
and Ernest's narrative statement of undisputed facts was
before the trial court when it entered the summary judgment or
to provide other documentation so indicating.  On remand, the
trial court entered an order stating that the narrative
summary of undisputed facts was given to the trial court in
open court on September 19, 2005, and thus was before the
court when it entered the summary judgment.  This Court is
satisfied that the narrative summary of undisputed material
facts was before the trial court when the summary judgment was
entered; thus Kelmor's argument that it was not is without
merit.
B.  Is the asset-purchase agreement ambiguous as to the
closing date?
Kelmor asserts that an ambiguity exists in the asset-
purchase agreement.  Ernest and Alabama Dynamics argue that no
ambiguity exists. 
"'"Whether 
a 
contract 
is 
ambiguous 
is 
a 
question
of law for the trial court to determine."  P & S
Business, Inc. v. South Central Bell Tel. Co., 466
1050479
14
So. 2d 928, 931 (Ala. 1985) (citing Haddox v. First
Alabama Bank of Montgomery, 449 So. 2d 1226, 1228
(Ala. 1984); Food Service Distributors, Inc. v.
Barber, 429 So. 2d 1025, 1028 (Ala. 1983)).  In
interpreting a contract, the "'words of the
agreement will be given their ordinary meaning.'"
Hibbett Sporting Goods, Inc. v. Biernbaum, 391 So.
2d 1027, 1029 (Ala. 1980) (quoting Flowers v.
Flowers, 334 So. 2d 856, 857 (Ala. 1976)).  An
"instrument is unambiguous if only one reasonable
meaning clearly emerges." Vainrib v. Downey, 565 So.
2d 647, 648 (Ala. Civ. App. 1990); see also Flowers,
334 So. 2d at 857.  "If the terms within a contract
are plain and unambiguous, the construction of the
contract and its legal effect become questions of
law for the court and, when appropriate, may be
decided by a summary judgment.  However, if the
terms within the contract are ambiguous in any
respect, the determination of the true meaning of
the contract is a question of fact to be resolved by
a jury."  McDonald v. U.S. Die Casting & Development
Co., 585 So. 2d 853, 855 (Ala. 1991) (citations
omitted).'"
Ex parte Gardner, 822 So. 2d 1211, 1217 (Ala. 2001) (quoting
Reeves Cedarhurst Dev. Corp. v. First Amfed Corp., 607 So. 2d
184, 186 (Ala. 1992)).
"In 
written 
instruments, 
two 
types 
of
ambiguities can arise:  a patent ambiguity and a
latent ambiguity.  McCollum v. Atkins, 912 So. 2d
1146, 1148 (Ala. Civ. App. 2005).  A patent
ambiguity results when a document, on its face,
contains unclear or unintelligible language or
language that suggests multiple meanings. Thomas v.
Principal Fin. Group, 566 So. 2d 735, 739 (Ala.
1990).  On the other hand, '[a]n ambiguity is latent
when the language employed is clear and intelligible
and suggests but a single meaning but some extrinsic
fact or extraneous evidence creates a necessity for
1050479
15
interpretation or a choice among two or more
possible meanings.'  Id."
Smith v. Ledbetter, 961 So. 2d 141, 145 (Ala. Civ. App. 2006).
The 
asset-purchase 
agreement 
contains 
two 
provisions 
that
arguably suggest a different closing dates.  Section 2(a) of
the asset-purchase agreement states: "The purchase and sale
contemplated hereunder shall be closed on June __, 2002."
Ernest and Alabama Dynamics argue that this section, coupled
with the time-is-of-the-essence clause, mandates a closing no
later than June 30, 2002.  Section 1(c) states, in pertinent
part: "Seller and Purchaser shall jointly perform an
examination of Seller[']s balance sheet as of Date of Closing
and the Purchase Price shall be adjusted to reflect any
changes therein since June 30, 2002."  Kelmor argues that this
section necessitates a closing date after June 30, 2002. 
Ernest and Alabama Dynamics argue that Section 1(c) is a
"true up" provision that allows for an adjustment in the
purchase price after the June closing calculated upon the June
30 balance sheet.  They note that this Court has previously
said in regard to "true up" provisions that it "will give
effect to the plain expressed intention of the parties by
determining that the objective manifestation of intent was to
1050479
In Extermitech, Inc. v. Glasscock, Inc., 951 So. 2d 689,
5
694-95 (Ala. 2006), this Court explained the procedure for
resolving an ambiguity in a contract:
"Some of this Court's decisions indicate that,
once the court determines that a contract is
ambiguous, it is for the finder of fact to resolve
the ambiguity.  See, e.g., McDonald v. U.S. Die
Casting & Dev. Co., 585 So. 2d 853, 855 (Ala. 1991),
and Ex parte Harris, 837 So. 2d 283, 290 (Ala.
2002).  However, as articulated in Alfa Life
Insurance Corp. v. Johnson, 822 So. 2d 400, 404-05
(Ala. 2001), the court, as a matter of law, should
apply rules of construction and attempt to resolve
any ambiguity in the contract before looking to
16
be bound by the review financial statement."  Murray v. Alfab,
Inc., 601 So. 2d 878, 888 (Ala. 1992).
Although the parties argue that sections 1(c) and 2(a) of
the asset-purchase agreement indicate two possible closing
dates, "the 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).  Furthermore,
"'[i]t is well settled that where there is uncertainty and
ambiguity in a contract, it is the duty of the court to
construe the contract so as to express the intent of the
parties.'"  BellSouth Mobility, Inc. v. Cellulink, Inc., 814
So. 2d 203, 216 (Ala. 2001) (quoting Weathers v. Weathers, 508
So. 2d 272, 274 (Ala. Civ. App. 1987)).   Given that the
5
1050479
factual issues to resolve the ambiguity. The
process for interpretation of a contract was
described in Alfa as follows:
"'When a trial court is [faced] with
a contract issue, it is important for the
trial court to determine as soon as
practicable the "threshold issue" whether
the contract is ambiguous.  If the trial
court 
determines 
that 
there 
is 
no
ambiguity, it must "'determine the force
and effect of the terms of the contract as
a matter of law.'"  However, if the trial
court finds the contract to be ambiguous,
it "must employ established rules of
contract 
construction 
to 
resolve 
the
ambiguity."  Voyager Life Ins. Co. v.
Whitson, 703 So. 2d 944, 948 (Ala. 1997).
If the application of such rules is not
sufficient 
to 
resolve 
the 
ambiguity,
factual issues arise:
"'"If one must go beyond the
four corners of the agreement in
c o n s t r u i ng 
an 
ambiguous
agreement, 
the 
surrounding
circumstances, 
including 
the
practical construction put on the
language of the agreement by the
parties to the agreement, are
controlling 
in 
resolving 
the
ambiguity."
"'Id. at 949.  Where factual issues arise,
the resolution of the ambiguity becomes a
task for the jury.'
"822 So.2d at 404-05 (some citations omitted;
emphasis added).  See, also, Boykin v. Bank of
Mobile, 72 Ala. 262, 269 (1882)(construction of
contract is a matter for the court unless extrinsic
17
1050479
evidence is considered); Lutz v. Van Heynigen
Brokerage Co., 199 Ala. 620, 629, 75 So. 284, 288
(1917); and Vesta Fire Ins. Corp. v. Liberty Nat'l
Life Ins. Co., 893 So. 2d 395, 404 (Ala. Civ. App.
2003) (courts attempt to resolve ambiguities before
submitting case to a jury)."
18
asset-purchase agreement called for a closing "to occur on
June __, 2002," and that it stated that "[t]ime is of the
essence of this Agreement," we conclude that the intent of the
parties was for the purchase to close no later than June 30,
2002.  Therefore, the trial court was correct in holding that
the asset-purchase agreement called for a closing sometime in
June 2002.
Kelmor also argues that the trial court erred in holding
that it "[had] failed to establish any valid waiver or
extension of the closing date past June, 2002."  The trial
court noted that Kelmor had failed to prove any of the
requisites of a valid waiver of a contractual provision.
Kelmor 
notes 
that 
Alabama 
Dynamics 
and 
Ernest's 
attorney 
wrote
Bayview Financial, 
Inc., 
Kelmor's 
financier, on July 23, 2002,
after the closing date contemplated in the asset-purchase
agreement, stating:  "The contemplated payment of these
closing costs by Alabama Dynamics, Inc. will result in the
1050479
19
Sale of Assets Agreement being modified to reflect this change
in terms."  Kelmor further notes that in his letter of August
21, 2002, Alabama Dynamics and Ernest's attorney stated that
"unless the Sale of Assets Agreement ... is not closed on or
before 5:00 p.m. August 23, 2002, we shall consider it null
and void and of no force and effect."  Thus, Kelmor argues,
the closing date contemplated by the asset-purchase agreement
was extended past June 30, 2002, and the parties to the asset-
purchase agreement waived compliance with that provision.
Kelmor, however, failed to cite this Court to any
authority in support of its argument.  "Rule 28(a)(10), Ala.
R. App. P., requires that an argument in an appellant's ...
brief contain 'citations to the cases, statutes, other
authorities, and parts of the record relied on.'" Long v.
Bryant, 992 So. 2d 673, 683 (Ala. 2008).  It is not the duty
of this Court to undertake to do Kelmor's legal research when
it offers only bare factual allegations in support of its
argument.  See City of Birmingham v. Business Realty Inv. Co.,
722 So. 2d 747, 752 (Ala. 1998) ("[I]t is neither this Court's
duty nor its function to perform an appellant's legal
research.").  "'[W]here no legal authority is cited or argued,
1050479
20
the effect is the same as if no argument had been made.'"
Steele v. Rosenfeld, LLC, 936 So. 2d 488, 493 (Ala. 2005)
(quoting Bennett v. Bennett, 506 So. 2d 1021, 1023 (Ala. Civ.
App. 1987)). 
Kelmor further contends that the trial court erred in
holding that any modification of the asset-purchase agreement
would 
have 
been 
void 
under 
the 
Statute 
of 
Frauds.
Specifically, the trial court held:
"However, even if the Court were to assume that
[Alabama Dynamics and Ernest] did agree to extend
the duration of the [asset-purchase agreement], the
Court finds that summary judgment is still warranted
because any such modification of the [asset-purchase
agreement] would have been invalid under the Statute
of Frauds.  Unwritten agreements to change a
material term of a contract for the sale of land in
exchange for promissory notes, including one for
time of performance, are void.  This is the same
regardless of whether [Alabama Dynamics and Ernest]
engaged in continuing discussions regarding a sale
of the business after June.  Accordingly, the Court
finds as a matter of law that because time was
expressly 'of the essence,' any modifications of the
contract 
duration 
would 
be 
a 
substantive
modification subject to the Statute of Frauds and
that there was no written modification of the
[asset-purchase agreement] extending the time for
closing that complied with the Statute of Frauds."
Kelmor argues that the letters of July 23 and August 21, 2002,
from Alabama Dynamics and Ernest's attorney meet the
requirements of the Statute of Frauds and thus served to
1050479
21
extend the closing date.  Section 8-9-2, Ala. Code 1975,
provides:
"In 
the 
following 
cases, 
every 
agreement 
is 
void
unless such agreement or some note or memorandum
thereof expressing the consideration is in writing
and subscribed by the party to be charged therewith
or some other person by him thereunto lawfully
authorized in writing:
"....
"(5) Every contract for the sale of
lands, tenements or hereditaments, or of
any interest therein, except leases for a
term not longer than one year, unless the
purchase money, or a portion thereof is
paid and the purchaser is put in possession
of the land by the seller."
Kelmor also cites Cammorata v. Woodruff, 445 So. 2d 867, 872
(Ala. 1983), in which this Court held:
"The general rule is that a contract required by the
statute of frauds to be in writing cannot be
modified by subsequent oral agreement. ...  While
the authorities are divided as to whether a written
contract falling within the statute of frauds may be
orally modified as to time of performance, it is
generally agreed that if the oral modification is
not just an extension of time, but goes to the
substance of the contract, the modification is
invalid."
Kelmor's argument fails because the July 23, 2002, letter
concerned the payment of closing costs; it did not mention an
extension of the closing date.  Furthermore, because the
1050479
22
asset-purchase agreement specifically stated that time was of
the essence, any extension of the closing date would have been
a substantive change to the terms of the asset-purchase
agreement.  Therefore, any such extension would have had to
meet the requirements of the Statute of Frauds, and the trial
court was thus correct in entering a summary judgment in favor
of Alabama Dynamics and Ernest.
IV.  Conclusion
Because the asset-purchase agreement, when it is
considered in the whole, indicates that it was the intent of
the parties to the agreement to close the sale during the
month of June 2002 and because the parties never effectively
extended the closing date beyond June 30, 2002, the trial
court was correct in entering a summary judgment in favor of
Alabama Dynamics and Ernest.  The summary judgment is
therefore affirmed.
AFFIRMED.
Stuart, Smith, Bolin, Parker, and Shaw, JJ., concur.
Lyons, Woodall, and Murdock, JJ., dissent.
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23
LYONS, Justice (dissenting).
I respectfully dissent.  The asset-purchase agreement
provides: "Seller and Purchaser shall jointly perform an
examination of Seller[']s balance sheet as of Date of Closing
and the Purchase Price shall be adjusted to reflect any
changes therein since June 30, 2002."  (Emphasis added.)  I
therefore cannot agree with the conclusion in the main opinion
"that the intent of the parties was for the purchase to close
no later than June 30, 2002."  ___ So. 3d at ___ (emphasis
added).  
Woodall, J., concurs.
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The appellants, the plaintiffs below -- Kelmor, LLC,
6
James S. Pace, and Melvin Zimmerman -- also argue that the
record contains evidence indicating that the defendants'
lawyers drafted the asset-purchase agreement and that any
ambiguity in the agreement therefore should be construed
against the defendants.  See, e.g., SouthTrust Bank v.
Copeland One, L.L.C., 886 So. 2d 38, 43 (Ala. 2003) ("[A]ny
ambiguity in a contract must be construed against the drafter
24
MURDOCK, Justice (dissenting).
Like Justice Lyons, I simply am unable to reconcile the
construction of the asset-purchase agreement successfully
urged upon this Court by the defendants, Alabama Dynamics,
Inc., and Gene Ernest, with the plain language of the
agreement itself.  Even if that construction could be
considered a reasonable one, however, that would simply mean
that the asset-purchase agreement is susceptible of two
reasonable constructions.  If this is so, this Court should
consider the fact that there is ample parol evidence that
would make a summary judgment in favor of the defendants
inappropriate, including, for example, testimony that the
parties did not intend to require a June 2002 closing and
evidence of a course of dealing before and after June 30
(including the post-June 30 letters quoted at length in the
main opinion) at odds with the notion that June 30, 2002, was
the deadline for closing the transaction.   
6
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of the contract.").
25
I write primarily, however, to address the language of
the asset-purchase agreement itself and, based on that
language, what I consider to be the reasonableness of the
plaintiffs' construction of the contract and the irrationality
of the defendants' construction.
As a preliminary matter, I note the main opinion's
characterization of the plaintiffs' argument as being that
§ 1(c) of the asset-purchase agreement "necessitates a closing
date after June 30, 2002."  ___ So. 3d at ___ (emphasis
added).  The essence of the plaintiffs' argument, however, is
not that the contract required a closing after June 30, but
that it did not require a closing before June 30.  It is the
plaintiffs' position that the trial court erred in holding
that the contract did not contemplate the possibility of a
closing after June 30.  This position is consistent with §
1(c), which provides for an adjustment of the purchase price
at closing for "any" changes to the assets and liabilities
after June 30.  See also Plaintiffs' brief on appeal, at pp.
49-50 (arguing that the plaintiffs "have shown the existence
of a genuine issue[] of material fact that the Agreement did
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26
not have a closing [deadline] of June 30, 2002"), p. 56
(stating that the mechanism described in § 1(c) "clearly
contemplates a closing after June 30, 2002"), and p. 61
(arguing that "[t]he circuit court's finding that the only
reasonable interpretation is the Agreement requires a closing
in June, 2002, must be reversed").
A.  Section 2(a) of the Asset-Purchase Agreement 
That said, I turn to the language found in § 2(a) of the
asset-purchase agreement stating that the sale "shall be
closed on June __, 2002."  At least in the context of the
other contractual provisions at issue, I submit that the fact
that the parties left this date blank indicates that there was
no final meeting of the minds as to what the closing date
should be.  A date left blank in a contract is hardly a
persuasive indication, or manifestation, of mutual assent as
to a date by which a closing had to occur.  
To reach its conclusion to the contrary, the main opinion
depends on the language in § 12(f) that "time is of the
essence."  The main opinion reasons: 
"Given that the asset-purchase agreement called for
a closing 'to occur on June __, 2002,' and that it
stated that '[t]ime is of the essence of this
Agreement,' we conclude that the intent of the
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27
parties was for the purchase to close no later than
June 30, 2002." 
  
___ So. 3d at ___.
I believe this reasoning asks too much of the boiler-
plate language of § 12(f).  The fact remains that the parties
left blank the provision in the agreement calling for a
closing date.  The main opinion reasons, however, that the
time-is-of-the-essence clause gives meaning to the closing-
date provision, requiring us to fill in the blank in that
provision.  I suggest the converse:  The absence of an agreed-
upon closing date serves to deprive the time-is-of-the-essence
clause of meaning.  In short, there is no date onto which the
time-is-of-the-essence clause can latch itself.  
This inefficacy of the time-is-of-the-essence clause in
the context of this particular agreement is all the more
likely in light of all the other dates in the asset-purchase
agreement that also were left blank.  These include the date
on which the agreement was entered into, the date by which the
agreement must be "accepted," and the date the agreement was
signed by the various parties. 
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28
Finally, I submit that the plaintiffs' construction of
§ 2(a) is more reasonable still when considered in conjunction
with the provisions of § 1(c), to which I now turn.
B. Section 1(c) of the Asset-Purchase Agreement
Section 1(c) of the asset-purchase agreement states:  
"Seller and Purchaser shall jointly perform an
examination of Seller[']s balance sheet as of the
Date of Closing and the Purchase Price shall be
adjusted to reflect any changes therein since June
30, 2002.  Any increase or decrease in total assets,
excluding plant and equipment, and total liabilities
shall be reflected by an identical change in the
total purchase price and the amount of cash due at
closing.  All items are to be accounted for in
accordance 
with 
Generally 
Accepted 
Accounting
Principles (GAAP), consistently applied."  
  
(Emphasis added.)
Unlike § 2(a), this section (particularly the emphasized
passages) contains no incomplete blanks and, therefore,
reflects no incomplete thoughts.  It therefore is much easier
to conclude that § 1(c), unlike § 2(a), reflects a final
meeting of the minds of the parties as to its subject matter.
Nonetheless, the plaintiffs and the defendants urge upon this
Court two different meanings of § 1(c).  I have been able to
make sense of only one of these.  
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29
The first possible meaning, and the one that makes sense
to me, is this:  Having agreed on a purchase price that would
be good through June 30, the parties simply provided in § 1(c)
for the purchase price to be adjusted if the closing did not
occur until after that date.  Specifically, § 1(c) means that
if the closing occurs after June 30, 2002, the parties will,
at that closing, examine the balance sheet reflecting the
assets and liabilities of the business as of that closing date
and adjust the purchase price to be paid at that closing to
reflect any changes in the assets and in certain liabilities
of the business occurring between June 30 and that closing
date.  ("[T]he Purchase Price shall be adjusted to reflect any
changes ... since June 30.")  Under this reading, the phrase
"examination of Seller[']s balance sheet as of the Date of
Closing" refers both to the effective date of the balance
sheet and the date on which the examination of it is to be
conducted.  Furthermore, the provision for an adjustment of
"the amount of cash due at closing" makes sense if, but only
if, it is based on an examination of a balance sheet that is
actually conducted at the time of the closing, rather than on
some date after the closing.
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30
This is a reading of § 1(c) that is simple and
straightforward.  It is a plain reading of the language used
in the asset-purchase agreement, see State ex rel. Riley v.
Lorillard Tobacco Co., 1 So. 3d 1, 7 (Ala. 2008) ("When a
court construes a contract, the clear and plain meaning of the
terms of the contract are to be given effect, and the parties
are presumed to have intended what the terms clearly state."
(citations and internal quotation marks omitted)), and one
that 
does 
not 
suffer 
from 
the 
inconsistencies 
and
irrationalities of the alternative construction urged by the
defendants.  In addition, this reading contemplates a
procedure for making adjustments to the purchase price at the
closing in a way that is common to transactions of this
nature.
The second possible meaning of § 1(c), and the one
adopted by the majority, is the one of which, try as I might,
I have not been able to make sense.  Specifically, according
to the defendants, § 1(c) should be read in light of the
defendants' interpretation of § 2(a) –- that the closing must
occur no later than June 30, 2002 –- as a provision requiring
a "true up" of the purchase price to occur at some time after
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31
June 30, 2002.  Apparently, under this reading, the "true up"
of the purchase price would utilize a balance sheet that
reflects assets and liabilities "as of the Date of Closing"
(no other balance sheet is referenced) and then would have the
parties make an adjustment to the purchase price to reflect
changes to the assets and liabilities occurring "since
June 30, 2002" i.e., between June 30 and the date of the true
up.  Under this interpretation, the phrase "examination of
Seller[']s balance sheet as of the Date of Closing" can be a
reference only to the date of the balance sheet, not to the
date on which the true-up examination of the balance sheet is
to be conducted, since by definition under this interpretation
the true up is to be conducted some time after the closing.
Unlike the first possible construction discussed above,
this interpretation of § 1(c) is not straightforward and does
not reflect a plain reading of the language of the asset-
purchase agreement.  It suffers from the following gaps and
irrationalities in its structure and application:
1.  The defendants argue that the reference in § 2(a) to
a closing "on June __, 2002," means that the parties intended
that the closing must occur "some time in June, 2002" or, in
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32
other words, on or before June 30, 2002.  Unlike the more
straightforward interpretation of § 1(c) discussed above,
which would entail an adjustment only at a post-June 30
closing for "any changes ... since June 30," the defendants'
interpretation of § 1(c) contemplates a "true up" of the
purchase price after a closing that, by the defendants' own
interpretation, could occur before June 30.  Thus, the
defendants' construction of the asset-purchase agreement
requires an adjustment to the purchase price to reflect
changes that could occur between June 30 and the date of the
"true up," while ignoring the changes that could occur between
the closing date and June 30 (a period that could be up to 29
days long and possibly longer than the time between June 30
and the subsequent date on which the "true up" is conducted).
2.  If, as interpreted by the defendants, the agreement
requires a closing on or before June 30, 2002, why provide for
any post-closing, post-June-30 adjustment to the purchase
price?  Why not just plan to look at the balance sheet as of
the date of closing and make whatever adjustments are needed
at that time?  There is nothing in the asset-purchase
agreement itself or in the facts pertaining to the nature of
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33
the business or the making of the agreement that suggests any
anticipated post-closing or post-June-30 development or event
that would warrant a reopening of the transaction and a
changing of the purchase price after what was, after all,
supposed to be a "closing" of the transaction. 
3.  The asset-purchase agreement is completely silent as
to when the true-up examination is to occur.  Is it to occur
within 30 days after the closing?  Within three months?  Why
not after the purchaser has a full year's experience operating
the business?  We are not told.  The time for this "true up"
is left unaddressed and undefined.  This despite the fact that
time, according to § 12(f) of the agreement, "is of the
essence."  Nor is there any anticipated external event or
development that would suggest when the true up is to occur.
See point 2, above. 
Presumably, the longer the wait to this indefinite true-
up date, the greater the potential change in the purchase
price.  Although commercial transactions can and do sometimes
contemplate 
certain 
post-closing 
adjustments 
to 
the
obligations of the parties, they typically do so in a much
more defined manner than this.  We have here, according to the
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34
defendants, an agreement that sets a specific purchase price
for specific assets and provides for an "of the essence"
timing for the closing of not later than June 30, yet also
provides that, for no known reason, the parties are, at some
indefinite date in the future, to reconvene and recompute the
purchase price for those assets based on whatever developments
may have occurred in the life of the business since the so-
called "closing." 
4.  When one attempts to apply the language in § 1(c) in
the manner urged by the defendants, as requiring a true up
after any closing, it becomes potentially unworkable.  As
interpreted by the defendants, § 1(c) is a true-up provision
that requires an adjustment of the purchase price after the
closing has occurred.  Specifically, it would require the
seller and the purchaser to "perform an examination of
Seller[']s balance sheet" and adjust the purchase "to reflect
any changes therein since June 30, 2002."  The problem is that
§ 1(c) specifically requires that the balance sheet to be
examined for purposes of this adjustment be the "Seller[']s
balance sheet as of Date of Closing."  Thus, under the
defendants interpretation of §§ 1(c) and 2(a) of the
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35
agreement, for any closing occurring before June 30, the
parties supposedly are required to perform the mathematically
nonsensical task of computing the difference in the value of
the assets and liabilities on the true-up date and the value
of the assets and liabilities on June 30 by computing the
difference in the value of the assets and liabilities on the
true-up date and the value of the assets and liabilities on
some date before June 30.  This is the equivalent of asking
someone to compute the difference between "A" and "C" by
computing the difference between "A" and "B," when "B" and "C"
are not necessarily equal. 
5. How can one adjust "the amount of the cash due at
closing," as expressly required by § 1(c), if, as the
defendants argue, the adjustment to be conducted pursuant to
that section is a "true up" that is to be conducted some
number of days (or perhaps weeks or months) after the closing?
C.  Conclusion
Based on the foregoing, the only way I can make sense of
the asset-purchase agreement is as an agreement that does not
set a specific closing date but does allow for the possibility
of a closing after June 30, 2002.  Without an agreed-upon
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36
closing date, the agreement should be read to require a
closing within a "reasonable time."  See Smith v. Pope, 280
Ala. 662, 666, 197 So. 2d 767, 770 (1967).  The question
therefore becomes whether the August 23 deadline for closing
set by the defendants was reasonable.  I would reverse the
judgment of the trial court and remand this cause for further
proceedings to consider this question.  Therefore, I dissent.