Opinion ID: 1708027
Heading Depth: 1
Heading Rank: 2

Heading: LaFarge's Motion for a Judgment as a Matter of Law

Text: This Court reviews a denial of a motion for a JML by the same standard the trial court used in initially denying the motion. Palm Harbor Homes, Inc. v. Crawford, 689 So.2d 3 (Ala.1997). Furthermore, we must determine whether the party who bears the burden of proof had produced substantial evidence creating a factual dispute requiring resolution by the jury. Bell v. T.R. Miller Mill Co., Inc., 768 So.2d 953, 956 (Ala.2000), citing Carter v. Henderson, 598 So.2d 1350 (Ala. 1992). We view the evidence in a light most favorable to the nonmoving party and entertain any reasonable inferences the jury may have been able to draw. Bell, 768 So.2d at 956. Notwithstanding, we accord the trial court's ruling on a question of law no presumption of correctness. Id. Under the general rule of the common law, everything annexed to the freehold estate was treated as a part of it. However, tenants placing trade fixtures on the property to be used in connection with trade or manufacturing were excepted from the operation of the foregoing general rule. Walker v. Tillis, 188 Ala. 313, 66 So. 54 (1914). Black's Law Dictionary 652 (7th ed.1999) defines trade fixtures as [r]emovable personal property that a tenant attaches to leased land for business purposes. Black's defines an improvement as [a]n addition to real property whether permanent or not; esp., one that increases its volume or that enhances its appearances. Black's Law Dictionary 761 (7th ed.1999). A tenant can remove trade fixtures at the end of a lease term even when the lease states that improvements and fixtures are not to be removed. See Walker, 188 Ala. at 327, 66 So. at 58. It seems to be the result of all these cases that covenants to redeliver, with all improvements, do not include trade fixtures of the tenant, but do cover all fixtures or improvements of the landlord which were intended, when placed upon the premises, to become a part of, or an improvement of, the freehold. Walker, 188 Ala. at 336, 66 So. at 60. In Walker, this Court discussed the governing intention of the tenant in determining the availability of the exception applicable to improvements attached to land in the form of trade fixtures, noting: [T]hat the intention of the tenant making the annexation was to serve the convenience of his trade, and not to enhance the freehold; that it was the reasonable intention of the tenant to place such trade fixtures upon the land for the purpose of better enjoying the articles annexed, or of using them in his trade as chattels, and to remove them at his pleasure. 188 Ala. at 325, 66 So. at 57 (emphasis added). Walker emphasizes that a tenant's intent in serv[ing] the convenience of his trade, rather than the method by which the article is attached to the land, is critical when determining whether the article is an improvement or a trade fixture. In Walker, this Court stated: [M]ere use, in connection with the business, does not so annex machinery to the realty as to constitute it a part thereof. Intention is more or less a factor in such inquiries. It often depends upon the intention of the party making the annexation. 188 Ala. at 324, 66 So. at 57.  [I]t is not so much the manner in which the fixture is attached to the freehold which controls the rights of the parties, as the relation of the parties, the intention in attaching, and the use to which it is put. Cubbins v. Ayres, 72 Tenn. (4 Lea) 329 (1880)(emphasis added). See also Kennedy v. Lane Foods, Inc. (In re Kennedy), 192 B.R. 282, 288 (Bankr.M.D.Ga.1996) (holding that under Alabama law the intention of the annexing party is the controlling factor in determining the character of the article annexed). As proof of intent, Evans and Stribling offer paragraph 6 of the Chattahoochee-LaFarge lease and contend that paragraph 6 makes it clear that the improvements belonged to them, as lessors. Evans and Stribling also rely on the testimony of Bruce Jones, LaFarge's director of properties, whom they called as an adverse witness. Jones testified that he wrote a letter to Stribling stating that all buildings and permanent structures would be left on the property when LaFarge vacated the property. Jones also stated that in his opinion, based upon the terms of the Chattahoochee-LaFarge lease, LaFarge was not entitled to destroy and remove several structures that were on the property. However, at the close of the evidence, Stribling and Evans voluntarily dismissed their breach-of-contract claim. Even had they not done so, under Walker, a tenant can remove trade fixtures at the end of the lease term even when the lease states that improvements and fixtures are not to be removed. Finally, for proof of intent Evans and Stribling rely on LaFarge's conduct in attaching the equipment and the structures and expressly refer to the nature of the annexation of the buildings and improvements to the land. Embracing the significance of the nature of the annexation, as opposed to the intention of the tenant making the annexation ... to serve the convenience of his trade, Walker, 188 Ala. at 325, 66 So. at 57, the trial court instructed the jury that it could take into consideration the manner in which property was connected to the land, that is, to say whether the property was connected solely as a means of affixing or fastening the property in its place or whether the property was affixed in a manner with the intent of becoming a part of the land.  The trial court's instruction incorrectly applied the law governing ordinary fixtures to a case that should be governed by the law applicable to trade fixtures. Ordinary fixtures are chattel that have been so attached to the land that they become a part and parcel of the land. Milford v. Tennessee River Pulp & Paper Co., 355 So.2d 687 (Ala. 1978). In determining whether an item is a fixture in a context other than a landlord/tenant relationship where a tenant pursues a business on the leased property, several criteria are used, including the method of annexation: (1) Actual annexation to the realty or to something appurtenant thereto; (2) Appropriateness to the use and purposes of the part of the realty with which it is connected; (3) The intention of the party making the annexation, of making permanent attachment to the freehold. This intention of making the annexation is inferred; (a.) From the nature of the articles annexed; (b.) The relation of the party making the annexation; (c.) The structure of and mode of annexation; (d.) The purposes and uses for which the annexation has been made. Langston v. State, 96 Ala. 44, 46, 11 So. 334, 335 (1891). See also Sharp v. Sharp, 540 So.2d 1373 (Ala.1989); Thornton Props. v. Alabama Power Co., 550 So.2d 1024 (Ala.Civ.App.1989). Using this test, this Court determined in Milford, where no landlord/tenant relationship existed, that equipment used to clean coal was a fixture to the land because the washers were set in concrete and had been permanently attached to the land for over 20 years. The exception to the general rule, applicable when a tenant attaches trade fixtures to carry on his business on the leased property, is stated to be `in favor of trade and to encourage industry,' and has ever since been regarded as the original ground for the exceptions as to trade fixtures made by tenants. Alabama Mach. & Supply Co. v. Roquemore, 205 Ala. 244, 247, 87 So. 435, 437 (1921). The trial court in MOCO, Inc. v. Gaines, 484 So.2d 470, 473 (Ala.Civ.App.1985), [1] acknowledged the trade-fixture exception and instructed the jury regarding the classification of property as property that has become a part of the real estate or as personal property capable of being removed from the land. The first instruction was identical to the three-pronged test outlined in Langston, supra . MOCO, 484 So.2d at 473. The court then instructed the jury that where a landowner lets his premises for business purposes, knowing the probable introduction thereon of the implements necessary to carry on the business, he (the landowner) impliedly contracts that the implements will remain personalty. Id. While it is true that some of the items LaFarge removed constituted equipment attached to the land and some were structures, Walker teaches that structures are nonetheless entitled to be classified as trade fixtures. In Walker, the Court discussed the English case of Elwes v. May, 3 East, 49, 51, in which a landlord sued the departed tenant alleging waste after the tenant had demolished stables, a carpenter shop, carthouse, pumphouse, fuelhouse, etc., the buildings being of brick, mortar, and tiling, with foundations about a foot in the ground, which the tenant had erected at his own expense. 188 Ala. at 328, 66 So. at 58. The English court found for the landlord, distinguishing buildings used for agriculture from those used for trade and affording lesser protection to the tenant engaged in farming. But this Court in Walker then noted that it had rejected the English rule in Harkness v. Sears, 26 Ala. 493 (1855), because public policy required that erections for agricultural purposes, put upon the land by the tenant, should receive the same protection afforded by the common law of England to fixtures for the purposes of trade. 188 Ala. at 329, 66 So. at 58. This Court in Walker then discussed Van Ness v. Pacard, 27 U.S. (2 Pet.) 137 (1829), in which the United States Supreme Court noted the extension of the rule regarding trade fixtures to agricultural tenants and, in so doing, spoke to the applicability of the exception for trade fixtures in the context of structures or buildings: Mr. Justice Story [writing for the Court in Van Ness v. Pacard ] held that the question whether a given article is capable of removal as a trade fixture did not depend upon the form or size of the building, whether it had a brick foundation, or whether it was one or more stories high, but that the only question was whether it was designed for the purposes of trade ; that a tenant could erect a large, as well as a small, building; that he could erect it one or two stories high, and with such foundation as he chose; and that he would not be liable for waste in tearing down and removing a wooden building, with a stone cellar and a brick chimney, upon a lot of land which he had rented for 20 years for the purpose of carrying on the business of dairyman, and as a residence for his family and servants while so engaged. Walker, 188 Ala. at 329-30, 66 So. at 58-59 (emphasis added). Evans and Stribling contend that MacArthur Bros. v. Middleton, 200 Ala. 147, 75 So. 895 (1917), overruled Walker. However, the structures at issue in Middleton were permanent residences and a rock bin. In Middleton, this Court, apparently based upon language in Walker, upheld the trial court's refusal to give an abstract instruction, which the tenant had requested, that the laws are extremely indulgent to the latter [the tenant] with respect to the fixtures annexed for a purpose connected with such temporary possession. 200 Ala. at 148, 75 So. at 895. The Court observed in Middleton that every expression in an opinion does not afford a basis for a special written charge. 200 Ala. at 149, 75 So. at 897. Continuing, the Court stated, Moreover, the articles dealt with in the Walker Case, supra, were of a very different nature and character, and were designed and used for a different purpose than the buildings in question. 200 Ala. at 148, 75 So. at 895. While the removal of permanent buildings was not in issue in Walker, the dictum in Walker is very clear on the point. Further, in Middleton, as was apparent from an earlier appeal in the case, the landlord contended that pursuant to an oral agreement entered into before construction, the houses, which were to be built on the land for the purposes of the tenant's operation, were to be left on the land and not to be removed from it. See Middleton v. Alabama Power Co., 196 Ala. 1, 71 So. 461 (1916). As to the rock bin, while the opinion does not state the facts with great clarity, there is a basis from which to conclude that ownership of the rock bin was also resolved before the execution of the agreement before the Court. Here, not only is there no evidence of an agreement dealing specifically with the prospect of the construction of the property at issue, Evans, when he was lessee, under the terms of the same paragraph 6, sold the property to LaFarge's predecessor and only later was the equipment securely attached to the land. We see no basis to retreat from the discussion in Walker of trade fixtures and the effect of clauses attempting to reserve improvements to the lessor as those clauses relate to trade fixtures. The trial court's instruction here is inconsistent with Walker and places impermissible emphasis on the method of attachment. On the question whether an article attached to land comes within the exception for a tenant's trade fixtures, which displaces the general rule that everything annexed to the freehold becomes a part of it, whether the property was fastened to the land or was attached in such a manner as to give a presumption that the property was a part of the land is not determinative.