Opinion ID: 1890401
Heading Depth: 1
Heading Rank: 4

Heading: A. Claims by Cole and Medical Holdings

Text: Cole's claim for specific performance sought to force Bruce to sell all of his stock to Cole individually. The claim of Medical Holdings for specific performance sought to force Bruce to sell all of his stock to Medical Holdings as a corporate entity, as distinguished from Cole as an individual. While the trial court purported to grant summary judgment in favor of both Cole and Medical Holdings on these claims against Bruce, the trial court granted only the specific performance sought by Medical Holdings. Precisely, the trial court ordered only that Bruce sell his stock to Medical Holdings as distinguished from Cole. The trial court did not grant Cole individually the relief he sought in his claim against Bruce for specific performance. Therefore, if the trial court erred in purporting to grant summary judgment in favor of Cole individually on his claim for specific performance, any such error is harmless. Thus, in determining the propriety of the specific performance ordered by the trial court, this opinion will analyze only the claim filed by Medical Holdings seeking that relief. Medical Holdings sought specific performance of these provisions of the Restrictive Stock Transfer Agreement: 4. Retiring, Resigning or Terminated Shareholder. In the event a Shareholder should voluntarily or involuntarily retire, resign, or terminate his employment with the corporation ( said retiring, resigning or terminated stockholder being hereinafter referred to as the resigning stockholder ) said resigning stockholder shall be obligated to sell his shares in the following manner: (a) Corporation's Obligation to Redeem The Corporation shall be obligated to redeem and the resigning Shareholder shall be obligated to sell to the Corporation all shares of the Corporation owned by the resigning shareholder at the time of such resignation, retirement or termination of employment. The purchase price and terms of any such purchase shall be as set forth in Paragraph 5 hereof. (Emphasis added.) Bruce advances several arguments for the proposition that the condition precedent to the right of Medical Holdings to redeem his stock did not occur. The condition precedent would be that Bruce involuntarily... terminate[d] his employment with the corporation. Bruce first argues that he was not a Medical Holdings employee to whom the term employment could be attributed at all. However, § 10-2B-1.40(9), Ala.Code 1975, includes corporate officers within the definition of employee. Therefore, as both the secretary and the treasurer of Medical Holdings, Bruce was a Medical Holdings employee to whom the term employment could be attributed. Bruce next argues that he was not effectively terminated as an officer in accordance with the bylaws of Medical Holdings. This argument depends on his prefatory argument that he was not effectively removed as a director. While the bylaws of Medical Holdings did not contain a provision for the removal of a director, the authority for such action is supplied by § 10-2B-8.08(a), Ala.Code 1975, which provides that [t]he shareholders may remove one or more directors with or without cause unless the articles of incorporation provide that directors may be removed only for cause. Thus, Bruce was effectively removed as a director on April 3, 2000 by a majority vote of the stockholders. Accordingly, the April 5, 2000 decrease in directorships from two to one was effective because the directorship eliminated was vacant at that time. Consequently, as the sole director of Medical Holdings, Cole could and did terminate Bruce as an officer of Medical Holdings on April 5, 2000. Bruce next argues that, in being discharged as he was from his offices of secretary and treasurer of Medical Holdings, he did not involuntarily ... terminate his employment with the corporation. He argues that the verb terminate introduces an ambiguity into the Restrictive Stock Transfer Agreement that can reasonably be interpreted to mean that it contemplates only his voluntarily terminating his own employment. This argument is foreshadowed by Bruce's testimony to his notion of the definition of involuntarily: What I define as involuntarily as stated before, involuntary means I decide to quit.... I decide to leave for whatever reason I want.... The question of whether a contract is ambiguous must be decided by the court as distinguished from the fact-finder. Universal Underwriters Ins. Co. v. Thompson 776 So.2d 81 (Ala.2000). `[T]he words of a contract are to be given their ordinary meaning.' Thompson, 776 So.2d at 84 (quoting BoWing Office Sys., Inc. v. Johnson, 744 So.2d 915, 918 (Ala. Civ.App.1999)). The court will so interpret a contract as to reconcile and to enforce all of its terms and not to ignore or to disregard any of its terms so long as such an interpretation is not patently unreasonable. See Yu v. Stephens, 591 So.2d 858 (Ala.1991), and Federated Guar. Life Ins. Co. v. Dunn, 439 So.2d 1283 (Ala.Civ. App.1983). If, interpreted according to these rules, a contract is not reasonably subject to conflicting meanings, it is not ambiguous. Id. An unambiguous `contract must be enforced as written.' Thompson, 776 So.2d at 84 (quoting BoWing Office Sys., Inc., 744 So.2d at 918). Bruce's argument that the Restrictive Stock Transfer Agreement can be interpreted to contemplate only his voluntarily terminating his own employment disregards or ignores, contrary to the rules of construction, the express term involuntarily. Therefore, this Court must reject this argument. Rather, this Court holds that Bruce's discharge from his corporate offices is within the meaning of the expression involuntarily ... terminate his employment with the corporation. Therefore, the condition precedent to the right of Medical Holdings to redeem Bruce's stock did occur in that Bruce did involuntarily ... terminate his employment with the corporation. The next issue is whether the tender by Medical Holdings to redeem the stock was adequate. Medical Holdings tendered $49,000 for Bruce's 490 shares. Bruce, however, argues that the agreement between him and Cole to value the stock of each at $250,000 on the financial statement each submitted to the bank constituted the valuation of each share of the common stock of the Company contemplated by paragraph 5(a) of the Restrictive Stock Transfer Agreement. While the record does contain substantial evidence that Bruce and Cole did agree that each would ascribe a total value of $250,000 to his stock on the financial statement each submitted to the bank, the record does not contain substantial evidence that Bruce and Cole agreed that this agreement would constitute the valuation contemplated by paragraph 5(a) of the Restrictive Stock Transfer Agreement. On the contrary, the evidence is undisputed that Bruce and Cole did not memorialize any such valuation as expressly required by paragraph 5(a). The tender by Medical Holdings of $100 per share for Bruce's stock was in accordance with the only valuation the parties ever adopted pursuant to paragraph 5(a). Therefore, the tender was adequate to bind Bruce to sell his stock to the corporation. The valid termination of Bruce from his employment by Medical Holdings quickened its right to redeem all of Bruce's stock, and Medical Holdings duly tendered the proper sum to Bruce to enforce the redemption. Therefore, the trial court correctly entered a summary judgment in favor of Medical Holdings on the issue of specific performance.