Title: Deupree v. Butner
Citation: 522 So. 2d 242
Docket Number: N/A
State: Alabama
Issuer: Alabama Supreme Court
Date: March 4, 1988

522 So. 2d 242 (1988)
James L. (Skip) DEUPREE, Jr., and Bay Development Corporation of Destin, Inc.
v.
Sam BUTNER and Louise Butner.
86-241.

Supreme Court of Alabama.
March 4, 1988.
*243 Thomas Reuben Bell and Michael W. Landers, Sylacauga, for appellants.
Ralph D. Gaines, Jr., of Gaines, Gaines &amp; Barnett, Talladega, and R. Carlton Smyly of Cabaniss, Johnston, Gardner, Dumas &amp; O'Neal, Birmingham, for appellees.
MADDOX, Justice.
The purchasers of a townhome in Destin, Florida, sued the developers in contract and for fraud on the ground that the developers promised them that they could construct "boat slips" to their townhomes, but the state of Florida would not grant them permits to do so.
Four issues are presented on this appeal by the developer from a judgment entered in favor of the purchasers on their contract and fraud claims:
(1) Was it error for the jury to award both compensatory damages for breach of contract and punitive damages for fraud under the facts of this case?
(2) Was there sufficient evidence to support a judgment on the fraud claim?
(3) Was the fraud claim time-barred?
(4) Was the verdict of the jury excessive?
James L. "Skip" Deupree is a developer.[1] He negotiated with Sam and Louise Butner, husband and wife, and sold them a townhome in a development called Pointe South in Destin, Florida. All of the townhomes in this development were to have individual "boat slips." The sales contract between Deupree and the Butners provided that a "boat slip" would be built and included in the price of their townhome, but slips of this type are difficult to obtain, because of extensive coastal property regulations, and, in order to construct and use one, a "submerged land lease" must be obtained from the Florida Department of Natural Resources ("DNR"). It is undisputed that a boat slip adds substantially to the value of the land to which it is appurtenant.
Deupree proceeded through proper channels toward obtaining the lease from DNR, but after the request for the lease was advertised, several objections were filed and a public hearing was scheduled. Deupree then asked that the application be put "on hold," but he continued building the boat slips. When he was challenged by DNR, he told DNR that the slips were being built by the individual owners of the townhomes. He told the Butners, on the other hand, that there would be no problem in getting permission from the state to build the slips. According to the Butners, they had already closed on the townhome contract of purchase when they determined that a usable private boat slip would not be provided.
They sued, claiming breach of contract and fraud. The jury, after a three-day trial, returned a verdict in their favor for $20,000 on their contract claim, and $59,001 on their fraud claim ($1 nominal damages and $59,000 in punitive damages). Deupree then brought this appeal.
*244 We discuss the issues as we have set them out above.
First, Deupree argues that the recovery for both fraud and breach of contract was improper because both claims arose from the same transaction and the Butners were thus allowed a double recovery. We disagree. In Alabama, a single transaction can support an award of damages for both breach of contract and fraud. Herring v. Prestwood, 414 So. 2d 52 (Ala. 1982). Deupree cites United States Fidelity &amp; Guaranty Co. v. McKinnon, 356 So. 2d 600 (Ala.1978), as authority for the proposition that damages cannot be recovered for both breach of contract and fraud on the same transaction. That case is distinguishable. In McKinnon, the fraud that was alleged was a representation that a contract existed when one did not. To make a determination of fraud in that case, the jury had to find that no contract existed; on the contrary, if the jury found that there was a contract, and a breach, then the jury had to find necessarily that there had been no fraud in the defendant's representation that a contract existed. In other words, the jury could not consistently have found that there was liability on both claims. The fraud alleged in this case does not involve a representation about the existence of a contract between Deupree and the Butners, but the question whether Deupree concealed certain facts regarding the difficulty or impossibility of obtaining the necessary submerged land leases for the boat slips.
In Herring v. Prestwood, supra, this Court addressed the issue of whether a fraud claim and a contract claim based on one set of facts may go to the jury. There, this Court held that "while McKinnon is a correct statement of the law, it only applies to the narrow situation when fraud in the inception of the contract is alleged." Herring v. Prestwood 414 So. 2d 52, 57-58 (Ala.1982) (emphasis added). We hold that the fraud alleged in this case was not fraud in the inception of the contract, but in fraudulent concealments after the contract was made, and that the facts of this case could support both a breach of contract claim and a fraud claim. In National Security Fire &amp; Cas. Co. v. Vintson, 414 So. 2d 49 (Ala.1982), this Court discussed the question of recovery of damages for both breach of contract and fraud, as follows:
We further find that there was not a double recovery in this case. The trial judge specifically charged the jury on the law of double recovery and specifically instructed the jury that a double recovery could not be awarded to the plaintiffs:
We hold that the Butners' recovery on both counts was not contrary to law.
Second, Deupree argues that there was no evidence of fraud or fraudulent concealment in this case. We hold that there is evidence of fraud here. The Butners closed the transaction on May 20, 1983. Deupree did not tell the Butners at that time that: (1) he had been informed by DNR that all applications for leases for docks on Old Pass Lagoon (where Pointe South was built) were being closely scrutinized; (2) a number of local objections to his application for a submerged land lease had been filed; (3) a public hearing on the application was necessary; (4) he had requested that the application be put "on hold"; and (5) that he had continued to build the boat slips and had told DNR that the construction was being carried on by the townhome owners.
Mr. Butner testified that he would not have closed on the townhome contract if Deupree had disclosed the problems he was having getting the boat slips approved. Deupree wrote Mr. Butner a letter on July 26, 1983, assuring him that getting approval for the slips was merely "a matter of time."
This Court has recently dealt with this same defendant and a very similar fact situation involving owners of other townhomes at Pointe South in Destin. See, Deupree v. Ruffino, 505 So. 2d 1218 (Ala. 1987). In that case, this Court held, under very similar facts, that Deupree was liable in fraud under Ala.Code 1975, § 6-5-102, which reads:
"§ 6-5-102. Suppression of material facts.
Because of the similarity of the facts of these two cases and the similarity of the arguments, we quote from the earlier opinion at length:
"The evidence discloses that rather than acquainting the purchasers at the time of closing with the difficulties he had encountered in obtaining the submerged land lease, Deupree misled them with an expectation of approval `at any time.' As seller of the property under contracts which obliged him to furnish boat docks for each purchaser, having initiated the process by which approval would be forthcoming, and having been informed during that process of the impediments to that approval, Deupree stood in a special relationship to his purchasers, who had no knowledge of those impediments, but who relied upon him; therefore, Deupree had an obligation to disclose his knowledge of those impediments at the time he took their money. As this Court stated in Jim Short Ford Sales, Inc. v. Washington, 384 So. 2d 83, 86 (Ala.1980): `A duty to speak depends upon the relation of the parties, the value of the particular fact, the relative knowledge of the parties, and other circumstances.' *246 Accord, American Bonding Co. v. Fourth National Bank, 206 Ala. 639, 641, 91 So. 480 (1921), quoting 12 R.C.L. § 70, 71: `[I]f one willfully conceals and suppresses such [material] facts, and thereby leads the other party to believe that the matters to which the statements may relate are different from what they actually are, he is guilty of fraudulent concealment.' See also Jackson Co. v. Faulkner, 55 Ala.App. 354, 315 So. 2d 591 (1975)." (Emphasis added.)
Deupree v. Ruffino, 505 So. 2d 1218, 1222 (Ala.1987).
We also hold that Deupree's special relationship to the plaintiffs in this case, and the evidence set out above, did suffice to show fraud. As we said in Ruffino, "Deupree had an obligation to disclose his knowledge of those impediments at the time he took their money." The jury's verdict was not plainly or palpably wrong, nor was it against the great weight of the evidence.
Third, Deupree argues that the fraud claim is barred by the applicable statute of limitations. The Butners' fraud claim was based on Deupree's concealment of the difficulties he was having with getting approval of the boat slips. Deupree wrote a letter to Mr. Butner on July 26, 1983, and stated that it was simply "a matter of time" until the permits would be issued. Deupree admitted at trial that he did not tell the Butners at closing that there were problems with the boat slips. Mr. Butner testified that he did not know about the problems until April of 1985, when depositions of several DNR officials were taken. The complaint in this case was filed on August 5, 1985.
Under Ala.Code 1975, § 6-2-3, a fraud claim does not accrue until the aggrieved party discovers the facts that constitute the fraud. Deupree argues that the Butners were told by an attorney in June of 1983 that there was no permit to use the boat slips and that the attorney advised them not to use the slips. Obviously, this presented a conflict in the evidence regarding the date the Butners got notice.
The question of whether a party discovered, or should have discovered, the fraud earlier, so as to start the running of the statutory period of limitations, is one properly left to the jury. Sims v. Lewis, 374 So. 2d 298 (Ala.1979).
In this case, the jury heard conflicting evidence on the issue of when the Butners discovered, or should have discovered, the fraud. The trial judge properly instructed the jury on this matter, and no objection was made to the instruction. Because the evidence was disputed, we cannot say, as a matter of law, that the fraud claim was barred by the statute of limitations. The jury apparently found, after hearing the testimony, that the claim was timely filed. That decision is not palpably wrong nor against the great weight of the evidence.
Last, Deupree argues that the $20,000 awarded by the jury for breach of contract was excessive. Our rule of review in such cases is well established:
Strait v. Vandiver, 472 So. 2d 1034, 1036 (Ala.1985).
*247 Shiver v. Waites, 408 So. 2d 502, 503 (Ala. 1981).
It is our opinion that the jury verdict was not plainly and palpably wrong in this instance. The contract between Deupree and the Butners contained the following terms:
"* * *
Deupree here argues that he was not liable on the contract claim, under the doctrine of merger, or, if he was liable, that a liquidated damages clause in the contract limited his liability to $10,000. Neither of these arguments was made in the court below, and we cannot consider them here on appeal. "On appeal this Court is limited to a review of the record alone, and an issue not reflected in the record as having been raised in the trial court cannot be raised for the first time on appeal." Mobile Wrecker Owners Association, Inc. v. City of Mobile, 461 So. 2d 1303, 1306 (Ala. 1984). There was substantial evidence before the jury that would have supported the award of $20,000 for the breach of contract relating to the building of the boat slip. The following testimony, given in deposition by the plaintiff's real estate expert, was read at trial:
Under this evidence, we hold that the jury's verdict was not plainly and palpably wrong or against the great weight of the evidence. The trial judge's charge as to the measure of damages for breach of contract was also clear, and it was not objected to by Deupree:
Based on the foregoing, the judgment of the trial court is due to be affirmed.
TORBERT, C.J., and ALMON, BEATTY and HOUSTON, JJ., concur.
[1]  Both the individual developer and the corporate developer appeal. Deupree is president of Bay Development Corporation of Destin, Inc., and owns half of its stock. For convenience, our references will be primarily to the individual developer.