Opinion ID: 1786003
Heading Depth: 1
Heading Rank: 2

Heading: Construction of the Sell-Back Agreement

Text: It is undisputed that the parties agreed that Thompson would be entitled to repayment of his first installment of $38,000, plus interest at the rate of 15%, if his request for repayment was made during the construction process. In other words, it is undisputed that Thompson would be entitled to repayment of his first installment at 15% interest if the sell-back agreement was triggered by BDD's work in procuring engineering reports, soil tests, and plans and specifications, and in traveling in connection with the contemplated condominium-development project. BDD, however, contends that the sell-back agreement was never triggered, because, it insists, construction on the project was never begun. According to BDD, the phrase during the construction process does not include such activities as procuring engineering reports, soil tests, and plans and specifications, and traveling. The resolution of this issue thus involves a matter of contract construction. `[W]e apply a de novo review to a trial court's determination of whether a [written] contract is ambiguous and to a trial court's determination of the legal effect of an unambiguous contract term.' Young v. Pimperl, 882 So.2d 828, 830 (Ala. 2003) (quoting Winkleblack v. Murphy, 811 So.2d 521, 525-26 (2001)). [A] contract is not ambiguous simply `because the parties allege different constructions of [it].' Avis Rent A Car Systems, Inc. v. Heilman, 876 So.2d 1111, 1122 (Ala.2003) (quoting Ex parte University of South Alabama, 812 So.2d 341, 345 (Ala.2001), quoting in turn Yu v. Stephens, 591 So.2d 858, 859 (Ala.1991)). A contract is ambiguous only if it is susceptible of more than one reasonable meaning, FabArc Steel Supply, Inc. v. Composite Constr. Sys., Inc., 914 So.2d 344, 357 (Ala.2005) (emphasis added), and `it is presumed that parties intend to make reasonable contracts.' 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) (emphasis added in Cellulink )). According to BDD, the phrase is not ambiguous, and we agree, although we disagree with BDD's interpretation of it. BDD argues that the verb construct means `to form by assembling or combining parts; build.' BDD's brief, at 18 (quoting The American Heritage Dictionary 394 (4th ed.2006)). Because no ground was ever broken on the condominium-development project, BDD insists, construction never began; therefore, BDD argues, the sell-back agreement was never triggered. However, BDD ignores the second word in the phrase, process, which The American Heritage Dictionary defines as [a] series of actions, changes, or functions bringing about a result. Id. at 1398. The parties did not use the phrase during construction, or even during the construction phase ; they used the phrase during the construction process.  (Emphasis added.) See generally Kweku Bentil, Fundamentals of the Construction Process 6 (1989) (the construction process is ordinarily composed of five phases, including (1) pre-bid, (2) contract procurement, (3) contract award, (4) actual construction, and (5) operating and maintenance). The word process must be regarded as adding something of substance to the phrase. Courts will not presume that the parties make use of words in their contracts to which no meaning is attached by them. McGoldrick v. Lou Ana Foods, Inc., 649 So.2d 455, 458 (La. Ct.App.1994). In other words, parties to a contract will not be imputed with using language that is meaningless or without effect. Id. See also Royal Ins. Co. of America v. Thomas, 879 So.2d 1144, 1154 (Ala.2003) (`It being presumed that every condition was intended to accomplish some purpose, it is not to be considered that idle provisions were inserted. Each word is deemed to have some meaning, and none should be assumed to be superfluous.' (quoting Hall v. American Indem. Group, 648 So.2d 556, 559 (Ala.1994))). The use of the word process broadens the scope of the phrase in the sell-back agreement. Indeed, courts have stated that the term construction process includes more than bricks and mortar, and that the term `construction delays' . . . is broad enough to include design, planning, and other facets of bringing the [project] to fruition. Brewhouse, Ltd. v. New Orleans Pub. Serv., Inc., 614 So.2d 118, 124 (La.Ct.App. 1993). For example, acquiring a `permanent first mortgage loan ' is an essential part of the ` construction process, because it finances a substantial proportion, if not all, of the cost of development, including site preparation and sometimes the actual cost of acquiring the raw land.' Bonniecrest Dev. Co. v. Carroll, 478 A.2d 555, 559 n. 5 (R.I.1984) (quoting Hershman, Permanent Financing, 1 Modern Real Estate Transactions, 455-56 (4th ed.1983) (emphasis added)). Had the parties intended to tie the provision in the sell-back agreement to the actual construction phase of the condominium-development project, they could easily have said so. Adopting BDD's litigation position would lead to the result that BDD, having received $38,000 from Thompsonwhether as a loan, as Thompson regards it, or as an investment, as BDD doescould simply abandon work on the project prior to commencement of actual construction and keep the $38,000 without any liability to Thompson. Nothing in the sell-back agreement suggests that the parties intended such an unreasonable result. Thus, we agree with Thompson that the sell-back agreement encompasses the earlier phases of the construction process, including the procurement of engineering reports, soil tests, and plans and specifications, and travel in connection with the contemplated condominium-development project. Consequently, the trial court did not err in holding that Thompson was entitled to recover the amount of his first installment with interest at the rate of 15%.