• Specific Performance Inappropriate; Gambling Order Upheld
  • March 19, 2015
  • Law Firm: Sirote Permutt P.C. - Birmingham Office
  • In this week's Alabama Law Weekly Update, we present for your consideration two decisions released by Alabama courts. In the first, the Alabama Court of Civil Appeals reviewed the awarding of specific performance of a contract in connection with the construction and delivery of a display for a showroom. In the second, the Alabama Supreme Court addressed the condemning of allegedly illegal gambling device, money, and documents related to such illegal gambling.

    Century Automotive Group v. Structure Designs, LLC, No. 2130344 (Ala. Civ. App. Nov. 21, 2014) (holding that trial court erred in awarding specific performance of contract instead of awarding damages in the amount of the purchase price paid)

    Century Automotive Group (“Century”), a corporation that owns a car dealership in Huntsville, Alabama, entered into a contract with Structure Designs, LLC (“SD”) for SD to construct and deliver a display for the dealership's showroom. The contract provided for Century to pay a purchase price of $24,900, and for SD to deliver and install the display within six months after receiving payment in full. Century provided the full payment on September 3, 2009, and the display was never delivered or installed. After Century demanded a refund of the purchase price and SD refused to do so, Century filed suit alleging breach of contract seeking damages in the amount of the full purchase price. The trial court granted Century's motion for summary judgment as to liability for breach of contract, and a trial ensued on the issue of damages. The Court entered a judgment ordering SD to deliver the display within 60 days, but all other claims of relief were denied. Century, in a post-judgment motion, argued that it had not sought specific performance of the contract and that the trial court had erred by failing to award it the purchase price of the display. The motion was denied, and Century appealed.

    On appeal, the Alabama Court of Civil Appeals discussed that the decision to grant specific performance lies mostly in the discretion of the trial judge, and will only be overturned if it is shown to be “palpably erroneous.” Noting that § 7-2-711(1), Ala. Code 1975, provides that a buyer may recover the amount that has been paid for goods when the seller fails to make delivery, the Court stated that a buyer may also seek additional remedies such as specific performance. The Court continued that specific performance may be awarded when the goods to be delivered are unique, and an injured party should not be put in a better position by a recovery of damages for the breach than he or she would have been in if there had been performance. Finally, the Court stated that it would be inequitable to require specific performance in favor of a party who has not fully and fairly performed all of the contract requirements. In light of this, the Court could not comprehend how awarding Century money damages for the amount of money it already paid would put Century in a better position, and reversing the trial court, held that money damages rather than specific performance was the appropriate remedy.

    Houston County Economic Development Authority v. State of Alabama, No. 1130388 (Ala. Nov. 21, 2014)
    (affirming the trial court's judgment condemning 691 illegal gambling devices, $288,657.68 in cash, and various documents related to illegal gambling)

    The Houston Economic Development Authority (“HEDA”), who operates a bingo gaming facility in Houston County called Center Stage Alabama (“Center Stage”), was raided by officers from the Houston County Sherriff's Office, the Alabama Department of Public Safety, and the Office of the Alabama Attorney General. The officers confiscated 691 allegedly illegal gambling devices, which included electronic gaming devices, computer servers, and gaming tables used for a roulette-style game called “Roubingo”, $288,657.68, and various documents allegedly related to illegal gambling. After the raid, the State instituted a civil-forfeiture proceeding seeking to condemn the items and money seized during the raid. HEDA operated Center Stage under a “Class C Special Permit to Operate Bingo Games” granted by the Houston County Commission to operate charitable bingo games. The trial court concluded that the electronic devices, computer servers, and Roubingo tables, constituted illegal gambling devices, ordered them destroyed or otherwise disposed of, and the seized money deposited into the State's General Fund. HEDA appealed.

    On appeal HEDA made four arguments. First, HEDA claimed that the State failed to meet its burden to establish that the seized gaming devices were illegal gambling devices and that the evidence instead demonstrated that the devices played legal bingo as that game has been defined by the Court. The Alabama Supreme Court disagreed with HEDA and held that the State met its burden by showing the seized devices constituted illegal gambling devices because the devices did not fit into one of the narrow constitutional amendments exempting “traditional bingo” from the general state prohibition of gambling. Next, HEDA contended that the language of the applicable statutes and a Houston County Commission resolution exempted the property from seizure and forfeiture under Alabama’s general antigambling laws. The Court disagreed, relying on the above analysis that the property was not exempted because the devices did not constitute “traditional bingo”, which was the only exemption provided for by the statutes and resolution. HEDA also argued that a bond-validation proceeding related to the construction and development of Center Stage conclusively established the legality of the electronic-gaming operation. The Court rejected this argument because the purpose of the bond-validation proceeding was to put to rest any question affecting the validity of the bonds, but the legality of certain gaming machines or devices was plainly not a subject of those proceedings. HEDA finally argued that there was no evidence indicating that the seized money or documents were used in or related to illegal gambling. The Court again disagreed with HEDA, relying on the trial court's determination that, from the record and testimony, all of the money and documents seized were clearly connected with the overall gambling activity at the facility, as the officer in charge of the seizure carefully detailed the location, areas, and amounts of both the documents and money.