author: WOODALL, Justice. HARWOOD, Justice LYONS, Justice

text:
    FORTIS BENEFITS INSURANCE COMPANY and Fortis Insurance Company v. Bertha Bernice PINKLEY, individually and as executrix for the estate of Jay Donald Pinkley, deceased.
    1040125.
    Supreme Court of Alabama.
    July 29, 2005.
    Rehearing Denied Oct. 21, 2005.

      Russell Myles and Karen Tucker Luce of McDowell, Knight, Roedder & Sledge, L.L.C., Mobile, for appellants.
    Banks C. Ladd, Mobile, for appellee.
   WOODALL, Justice.

Fortis Benefits Insurance Company and Fortis Insurance Company (hereinafter collectively referred to as “Fortis”) appeal by permission, pursuant to Rule 5, Ala. R.App. P., from the denial of their motion for a summary judgment in an action commenced by Bertha Bernice Pinkley, individually and as executrix of the estate of her deceased husband, Jay Donald Pink-ley, to recover life-insurance benefits. We reverse and remand.

For the purpose of this appeal, we treat the following facts as undisputed. In 1991, Jay Pinkley purchased a $100,000 life-insurance policy, the obligations of which were subsequently assumed by Fortis. The policy application listed Bertha Pink-ley as the primary beneficiary, and Paul Sanford, Bertha’s son and Jay’s stepson, as the contingent beneficiary. The policy provided, in pertinent part:

“CHANGE OF BENEFICIARY: The beneficiary designation contained in the application will remain in effect until changed. The Owner may change the beneficiary at any time during your lifetime. A satisfactory written notice must be filed at the Home Office. The change will take effect only upon being recorded by [Fortis].”

(Emphasis added.)

In January 2000, someone identifying himself as Jay D. Pinkley telephoned For-tis’s office. During that telephone call, which Fortis recorded, the caller requested a change-of-beneficiary application form (“the request form”). The caller provided a Fortis representative with the policy number and Jay D. Pinkley’s Social Security number. Fortis sent a request form to Pinkley’s address as reflected in its records, and, in February 2000, received the completed request form designating Dianne Sanford, the wife of Paul Sanford, as the primary beneficiary. The request form designated “Bernice Pinkley” as the contingent beneficiary. The name “Jay D. Pinkley” was handwritten on the line immediately above the words “Policyowner’s signature.” The request form contained the Social Security numbers of both Pink-leys and purported to be witnessed by Paul Sanford. The telephone number given on the request form matched the telephone number on Jay Pinkley’s policy-application form. On February 28, 2000, Fortis stamped the request form with acknowledgment of receipt and agreement to the requested change. Fortis then mailed a copy of the stamped request form to Jay Pinkley’s address of record. Fortis received no objection to the change from Jay Pinkley.

Jay Pinkley died on April 26, 2001. On or about May 15, 2001, Dianne Sanford filed a claim for the policy benefits. Fortis paid her the proceeds of the policy on May 22, 2001.

In March 2003, Bertha Pinkley, through her attorney, also filed a claim for the benefits of Jay Pinkley’s life-insurance policy, alleging that Jay Pinkley’s signature on the request form was forged. Fortis denied Pinkley’s claim, saying that it had discharged its contractual obligations by paying the policy benefits to Dianne Sanford in reliance on the request form.

On March 25, 2003, Pinkley sued Fortis, alleging various theories arising out of its refusal to pay her the proceeds of the policy on Jay Pinkley’s life, including (1) negligence, (2) wantonness, (3) breach of contract, and (4) bad-faith failure to pay a claim. Fortis and Pinkley filed cross-motions for a summary judgment. In an order denying both motions, the trial judge certified a controlling question of law, thereby laying the predicate for a permissive appeal from an interlocutory order, pursuant to Rule 5. The order stated, in pertinent part:

“[T]he court finds and hereby CERTIFIES that this order involves a controlling question of law as to which there is substantial ground for difference of opinion, that an immediate appeal from this order would materially advance the ultimate termination of this litigation, and that an appeal would avoid protracted and expensive litigation.
“In this case, [Pinkley] has sued For-tis because she claims Fortis improperly paid the death benefits of her late husband’s life insurance policy to [Pinkley’s] daughter-in-law, who, according to For-tis’ records, was the beneficiary of record at the time of the decedent’s death. [Pinkley], however, claims that she was the proper beneficiary and that the change of beneficiary form that substituted her daughter-in-law as the beneficiary was forged. It is undisputed that the benefits were paid to the daughter-in-law without any notice of a competing claim by [Pinkley]. The controlling question of law presented in this matter is whether [Ala.Code 1975, § ] 27-14-24, bars [Pinkley’s] claims. Section 27-14-24 provides ... as follows:
“ ‘Whenever the proceeds of, or payments under, a life or disability insurance policy or annuity contract, heretofore or hereafter issued, become payable in accordance with the terms of such policy or contract, or the exercise of any right or privilege thereunder, and the insurer makes payment thereof in accordance with the terms of the policy or contract or in accordance with any written assignment thereof, the person then designated in the policy or contract, or by such assignment, as being entitled thereto shall be entitled to receive such proceeds or payments and to give full acquittance therefor; and such payments shall fully discharge the insurer from all claims under the policy or contract, unless, before payment is made, the insurer has received at its home office written notice by, or on behalf of, some other person that such other person claims to be entitled to such payment or some interest in the policy or contract.’ ”

This Court granted Fortis’s petition for permission to appeal to consider a question of first impression in Alabama: whether § 27-14-24 protects an insurer from double liability if in good faith it pays life-insurance benefits to an individual claiming the benefits on the basis of a forged change-of-beneficiary request form. Stated more narrowly, the question is whether a life insurer that receives a change-of-beneficiary request form, regular on its face and executed by a person purporting to be the owner of the policy, has a duty to investigate the authenticity of the signature before paying death benefits under the policy to the person designated on the form as the primary beneficiary. We answer that question in the negative.

“ ‘It is the general rule that when the insurer makes payment of the proceeds of insurance to the person who by the policy is the proper recipient, such payment is a discharge of the liability of the insurer.’ ” Alfa Life Ins. Corp. v. Culverhouse, 729 So.2d 325, 327 (Ala.1999) (quoting Miller v. Paul Revere Life Ins. Co., 81 Wash.2d 302, 305, 501 P.2d 1063, 1065 (1972)) (emphasis added). In accord with this general rule, “the insurer is not under any duty to determine whether the change of beneficiary was procured or induced by improper means where it has no reason to believe or know that such was the case.” 5 George J. Couch et al., Couch on Insurance § 28:97 (Rev.2d ed.1984). Similarly, it is also said:

“Where an insurer, acting .in good faith without any actual knowledge of the insured’s mental incompetency, has recognized an apparently duly executed change of beneficiary and has paid the proceeds of the insurance to the substituted beneficiary, it is not liable to the original beneficiary when sued by him or her even though it is established that the insured was in fact incompetent and lacked the capacity to make the change of beneficiary. That is, the insurer is not under any duty to investigate the mental competency of the insured to change the beneficiary unless it knows of circumstances reasonably suggesting the probability of his or her mental incompetency.
“Similarly, an insurer is not required to investigate to determine whether a change of beneficiary had been procured by undue influence in the absence of knowledge of facts which would indicate that the change might have been so procured.”

4 Lee R. Russ and Thomas F. Segalla, Couch on Insurance 3d § 60:77 (1997) (emphasis added). See also Demerath v. Knights of Columbus, 268 Neb. 132, 137, 680 N.W.2d 200, 204 (2004) (insurer did not “have any contractual or fiduciary duty to make inquiry as to the propriety of the change in beneficiary forms submitted to it”).

Section 27-14-24 is consistent with this general rule and is one of a number of “facility of payment” statutes in force in various states. See, e.g., Cal. Ins.Code, § 10172 (West 1993); Conn. Gen.Stat., § 38a-453(c)(2005); Fla. Stat. Ann., § 222.13 (West 1998); Michie’s Ky.Rev. Stat. Ann., § 304.14-260 (Lexis Nexis 2001); La.Rev.Stat. Ann., § 22:643 (West 2004); Michie’s Md.Code Ann., Ins. § 12-208 (Lexis Nexis 2003); Tex. Ins.Code Ann., § 1103.103 (Vernon 2004); Wash. Rev.Code Ann., § 48.18.370 (2004); Mi-chie’s W. Va.Code, § 33-6-22 (Lexis Nexis 2003).

Such statutes are aptly described as “narrowly drawn” facility-of-payment clauses that frequently appeared in certain types of insurance contracts. 15 William S. McKenzie & H. Alston Johnson III, Louisiana Civil Law Treatise: Insurance Law & Practice § 256 (2d ed.1996). Facility-of-payment clauses typically appeared in “the so-called ‘industrial’ life insurance” or “burial policy.” Id. “It was generally held that the clause was for the protection of the insurer, affording it protection against later claims from others who might arguably have a superior right to the proceeds.” Id. It was sometimes said that “payment of the policy proceeds to a person entitled thereunder absolutely discharged] the insurer of all liability.” 2A John Appleman & Jean Appleman, Insurance Law and Practice § 1163, at 306 (1966) (emphasis added). At other times, it was held that payments must be “made by the insurer in good faith to a person entitled to the benefits thereunder.” Id. See Dorsey v. Metropolitan Life Ins. Co., 145 So. 304, 306 (La.App.1933) (“[I]t is a complete defense for the insurer to show that in good faith it has already made payment to some one who is included among those mentioned in the facility of payment clause.”). Statutes such as § 27-14-24 “writ[e] into policies a form of facility of payment clause.” McKenzie & Johnson, Louisiana Civil Law Treatise, supra, at § 256.

The good-faith element that characterizes the general rule and the typical facility-of-payment clause was written into § 27-14-24. That Code section expressly insulates the insurer from liability for a double payment “unless, before payment is made, the insurer has received at its home office written notice by, or on behalf of, some other person that such other person claims to be entitled to such payment or some interest in the policy or contract.” (Emphasis added.) Indeed, Pinkley concedes that the statute shields insurers from liability for double payment in a number of situations, including

“(1) claims that named beneficiaries are not eligible to receive benefits because of ‘Slayer’s Statute’ issues that arise after payment, (2) receipt of a change of beneficiary application after the benefits have been paid, (3) claims that the owner of the policy was unduly influenced or incompetent at the time he or she signed the beneficiary designation or change of beneficiary application that arise after payment of the benefits, (4) claims that the owner was contractually obligated to name someone else as the beneficiary that arise after payment, (5) claims that a creditor has a lien against the benefits that arise after payment, and (6) other claims that attempt to collaterally attack payment to the beneficiary named by the owner in the insurer’s records after payment to the named beneficiary.”

Pinkley’s brief, at 37-38 (emphasis added).

Pinkley contends, however, that forgery presents a situation that differs fundamentally from these situations because, she argues, § 27-14-24 applies only to payments that are made “in accordance with the terms of the policy or contract.” She contends that benefits paid in reliance on a forged change-of-beneficiary request form are not made “in accordance with the terms of the policy or contract.” She points to the policy provision limiting the right to change the beneficiary to the policy owner, in this case Jay Pinkley, and insists that the change in beneficiary was made not by Pinkley, but by an imposter. Thus, she argues, Fortis’s payment to Sanford fell outside the protection of the statute.

For this proposition, Pinkley cites Bigley v. Pacific Standard Life Insurance Co., 229 Conn. 459, 642 A.2d 4 (1994). In that case, the Supreme Court of Connecticut, purporting to apply the “general rule,” 229 Conn, at 463, 642 A.2d at 6, held that the good-faith payment of life-insurance benefits to a claimant who had forged the signature of the policy owner on a change-of-beneficiary request form did not discharge the insurer “from its contractual obligation to pay the [original beneficiary].” 229 Conn, at 464, 642 A.2d at 6-7. In so holding, the Court stated:

“Unless the insurer has reason to believe that the beneficiary named by the policyholder is not entitled to receive the policy proceeds, payment to the policyholder’s designated beneficiary discharges the insurer from liability under the policy.
“Payment of the policy proceeds to a person fraudulently substituted as beneficiary, however, does not relieve the insurer of its contractual obligation to pay the beneficiary actually designated by the policyholder. Western & Southern Life Ins. Co. v. Whiston, 30 Ill. App.3d 844, 333 N.E.2d 72 (1975); Stavros v. Western & Southern Life Ins. Co., 486 S.W.2d 712 (Ky.App.1972); Union Labor Life Ins. Co. v. Parmely, 270 Md. 146, 311 A.2d 24 (1973); ... cf. McNabb v. Kentucky Central Life Ins. Co., 631 S.W.2d 253 (Tex.App.1982)....
“This conclusion is consistent with the general rule that a change of beneficiary of an insurance policy can be effected only by following the procedure prescribed by the policy.... The life insurance policy ... sets forth only one method by which a change of beneficiary may be effected: ‘[T]he owner [of the policy] may change the Beneficiary ... by filing a satisfactory written request with us at our Executive office.... ’ (Emphasis added.) Because [the forger], rather than the owner of the policy, signed the change of beneficiary form and submitted it to the defendant ..., the request did not comply with the terms of the contract and, therefore, did not effect a change of beneficiary.”

229 Conn, at 463-64, 642 A.2d at 6-7 (footnote omitted).

We find Bigley unpersuasive. The four cases cited by that Court afford little support for its holding or its rationale. Two of the cases — Stavros v. Western & Southern Life Insurance Co., 486 S.W.2d 712 (Ky.App.1972), and Union Labor Life Insurance Co. v. Parmely, 270 Md. 146, 311 A.2d 24 (1973) — did not involve a forgery. In Parmely, the insured, Clyde Parmely, entered into a ceremonial marriage with Dorothy Pearsall, while he was still legally married to Francina Parmely. 270 Md. at 147, 311 A.2d at 24-25. Pursuant to the policies at issue, “the eligible beneficiary was [the insured’s] ‘widow,’ ” who was not designated by name. 270 Md. at 147, 311 A.2d at 25. Maryland’s facility-of-payment statute provided, in pertinent part:

“ Whenever the proceeds of or payments under a life ... insurance policy ... become payable in accordance with the terms of such policy ... and the insurer makes payment thereof in accordance with the terms of the policy ..., the person then designated in the policy ... as being entitled thereto shall be entitled to receive such proceeds or payments and to give full acquittance therefor, and such payments shall fully discharge the insurer from all claims under the policy ... unless, before payment is made, the insurer has received ... [notice] ... that such other person claims to be entitled to such payment or some ' interest in the policy or contract.’ ”

270 Md. at 149-50, 311 A.2d at 26 (emphasis omitted; emphasis added).

After the insured’s death, the insurer paid the benefits to Dorothy, who, it was ultimately determined, “had not been validly married to [the insured].” 270 Md. at 150, 311 A.2d at 26. Consequently, the trial court entered a summary judgment in favor of Francina, the “widow,” in her action against the insurer for the benefits. The Maryland Court of Appeals affirmed, stating:

“The statute is nothing more than an attempted codification of the rule applied in the cases cited earlier. As we have already intimated, had Dorothy been designated by name in the policies, [the insurer] would have been discharged upon making payment to her, unless it had received prior notice of Francina’s claim. In other words, since Dorothy had not been validly married to Clyde, she was not his ‘widow’ under the policies. Hence, payment to her did not discharge [the insurer] from its obligations. On the other hand, Francina, as the ‘widow,’ is entitled to payment.”

270 Md. at 150, 311 A.2d at 26 (emphasis added).

Stavros is similarly inapposite. There, the insurer paid benefits to the sister of an insured 11-year-old minor in reliance on a change-of-beneficiary request form that required the “Signature of Life Insured if 15 years or older, otherwise of Parent or Guardian.” 486 S.W.2d at 713. Although the signatory was, in fact, the minor’s legal guardian, she signed the form as his “sister,” rather than as “parent or guardian.” Id. The Court of Appeals of Kentucky held that the insurer’s payment to the sister did not discharge its liability, reasoning that the “circumstances were enough to put the [insurer] on notice that [the sister’s] attempted change of beneficiary was an unauthorized act, patently contrary to the [insurer’s] requirements on its change of beneficiary form.” 486 S.W.2d at 714 (emphasis added).

Although McNabb v. Kentucky Central Life Insurance Co., 631 S.W.2d 253 (Tex. Ct.App.1982), did involve a forgery, the scope of the insurer’s duty to discover forgeries was not directly in issue in that case. The case was actually decided on other grounds. Moreover, to the extent that McNabb does speak to that issue, it actually supports Fortis, stating that “[t]he insurer is not under any duty to determine whether the change of beneficiary was procured or induced by improper means where it has no reason to believe or know that such was the case.” 631 S.W.2d at 255 (affirming a summary judgment for the insurer).

The only other case cited in Bigley actually involving a forgery is Western & Southern Life Insurance Co. v. Whiston, 30 Ill.App.3d 844, 333 N.E.2d 72 (1975). In that case, the wife of Edward Whiston forged his name on “a request for ... payment of the cash surrender value” of her husband’s life-insurance policy, and, consequently, received the cash surrender value of the policy. In a declaratory-judgment action to determine the insurer’s liability, the Appellate Court of Illinois concluded that Edward Whiston was entitled to reinstatement of the policy. Its conclusion, however, was unsupported by citation to even a single authority, and its analysis and rationale consisted entirely of the following: “There is no question but that Edward Whiston was the sole person who could request the payment of the cash surrender value of his policy. Simply stated, the [insurer] negligently paid out the proceeds on a forged signature to the wrong party.” Whiston, therefore, is not helpful.

In addition to citing only unpersuasive authority, Bigley does not attempt to explain why forgery is outside the general rule. Thus, neither PinMey, nor any case she cites, explains why the insurer has a duty to discover forgeries but not to discover other irregularities, such as undue influence. As we noted earlier in this opinion, Pinkley admits that an insurer has no duty to discover whether “the owner of the policy was unduly influenced or incompetent at the time he or she signed the beneficiary designation or change of beneficiary application.” Pinkley’s brief, at 37-38 (emphasis added). She attempts to distinguish between forgery and undue influence on the ground that “[a] forged instrument is void,” Ex parte Floyd, 796 So.2d 303, 308 (Ala.2001), while an instrument “obtained by undue influence, is not wholly void, but only voidable.” McCary v. Robinson, 272 Ala. 123, 127, 130 So.2d 25, 29 (1961). In our view, however, the distinction is more formal than substantive in this context.

Forgery is a species of fraud, Life Insurance Co. of Georgia v. Smith, 719 So.2d 797, 809 (Ala.1998), as is undue influence. Pruitt v. Pruitt, 343 So.2d 495 (Ala.1977); Dusenberry v. First Nat’l Bank of Birmingham, 271 Ala. 207, 122 So.2d 716 (1960). The essence of undue influence is that the will of the influencing party so overpowered the will of the other party that the other party’s act essentially became the act of the influencing party. See Wyatt v. Riley, 292 Ala. 277, 280, 293 So.2d 288, 289 (1974). Legally, therefore, a change of beneficiary procured by undue influence is — like a forgery — not the act of the policy owner.

This is especially so in the case of fraud in the factum, that is, where a signatory is “ ‘deceived into signing the instruments in ignorance of their true character.’ ” Sheffield v. Andrews, 679 So.2d 1052, 1054 (Ala.1996) (quoting Cumberland Capital Corp. v. Robinette, 57 Ala. App. 697, 702, 331 So.2d 709, 713 (1976)) (emphasis added). It is well settled that “ ‘[a] signature procured by [fraud in the factum] is considered forged under Alabama law.’ ” 679 So.2d at 1054 (quoting Robinette, 57 Ala.App. at 702, 331 So.2d at 713)(emphasis added). In the case of fraud in the factum, the signature is — in fact — genuine. Nevertheless, it is legally tantamount to a forgery and the instrument is therefore void. Thus the law recognizes no distinction that depends simply on whether it was the owner of the policy who actually “put pen to paper.”

Clearly, § 27-14-24 makes no such distinction. It simply states that when “the insurer makes payment ... in accordance with the terms of the policy” to “the person then designated in the policy, ... such payments shall fully discharge the insurer,” absent written notice of competing claims. (Emphasis added.) The purpose of this statute is similar to the purpose of a facility-of-payment clause, namely, to protect an insurer that pays benefits to one “then designated” as the beneficiary against a subsequent claim by one actually possessing a superior right to the benefits. See Smooth v. Metropolitan Life Ins. Co., 157 So. 298, 299 (La.Ct.App. 1934). Logically, in many cases, it would be as difficult for the insurer to discover one type of fraud as the other.

In that connection, Pinkley contends that “Fortis could have easily detected the irregularity by reviewing the signature samples of Mr. Pinkley in its records.” Pinkley’s brief, at 32. We disagree. The forged signature is not markedly different from the samples of Pinkley’s bona fide signature contained in the record. To charge the insurer with liability in the case of a forgery but not in the case of undue influence would place form over substance, and such an approach is not authorized by the statute.

The phrase “payment ... in accordance with the terms of the policy” refers primarily to the time the proceeds become payable. Specifically, it refers back to the first word of the statute, namely, “[w]hen-ever,” that is, “whenever,” pursuant to the policy, “the proceeds of [the policy] ... become payable.” Thus, “whenever” an event triggers the insurer’s duty to pay and payment is made to “the person” whose name appears on the face of the policy or any change to the policy in regular form, as the proper beneficiary, payment has been made “in accordance with the terms of [the] policy.”

Any other construction defeats the purpose of the statute. Thus, we agree with Fortis, which states: “[Section 27-14-24] presumes that benefits might be paid to someone with an inferior claim. Under [Pinkley’s] construction of the statute, an insurer would already have a complete contractual defense to any claims by anyone other than the named beneficiary, and § 27-14-24 would be a statute without a purpose.” Fortis’s reply brief, at 14 (emphasis added).

Under the undisputed facts of this case, a Fortis representative spoke by telephone with an individual purporting to be Jay Pinkley. The caller supplied Fortis with Jay D. Pinkley’s Social Security number and the policy number of Jay Pinkley’s life-insurance policy. Fortis sent the request form to Jay Pinkley’s address of record. In addition to the witnessed signature purporting to be that of the policy owner, the completed request form Fortis received contained Jay Pinkley’s address and the telephone number that was listed on his policy application. The request form bearing Fortis’s stamped acceptance was mailed to Jay Pinkley’s address of record. Before it paid the proceeds, For-tis had received no notice, actual or otherwise, of a competing claim or interest in the policy. The statute requires no more of an insurer than Fortis did in this case.

In summary, we hold that § 27-14-24 does not cast upon the insurer a duty to investigate and discover whether a change of beneficiary has been procured by forgery, and that where an insurer in good faith pays life-insurance benefits in reliance on a forged change-of-beneficiary request form, which appears regular in all respects, the insurer is fully discharged “from all claims under the policy or contract.” Under the undisputed facts of this case, Fortis was entitled to a summary judgment. Consequently, the order denying Fortis’s motion is reversed, and the case is remanded for the entry of a summary judgment for Fortis.

REVERSED AND REMANDED.

NABERS, C.J., and SEE, STUART, SMITH, BOLIN, and PARKER, JJ., concur.

HARWOOD, J., concurs specially.

LYONS, J., dissents.

HARWOOD, Justice

(concurring specially).

I concur. I write specially only to make one further point.

The case upon which Bertha Bernice Pinkley most heavily relies, Bigley v. Pacific Standard Life Insurance Co., 229 Conn. 459, 642 A.2d 4 (1994), considered and found unpersuasive by the main opinion, did not involve the interpretation and application of a “facility of payments” statute. Although the insurer in that case, Pacific Standard Life Insurance Company, sought to invoke the protection of § 38a-453(c), Conn. Gen.Stat., providing “facility of payment” protection under certain circumstances, the Bigley Court concluded that the statute, by its very terms, was inapplicable to the situation before it. The Court pointed out that the statute provided, in relevant part:

“ ‘[R]ights of creditors of insured against beneficiary, (a) The beneficiary of any life insurance policy, being a person other than the insured, whether named as beneficiary in the original policy or subsequently named as beneficiary in accordance with the terms of the policy, shall be entitled to the proceeds of the policy as against the representatives or creditors of the insured, unless the policy was procured or the designation of a beneficiary was made with intent, express or implied, to defraud creditors....
“ ‘(c) The company issuing the policy shall be discharged of all liability thereunder by payment of the proceeds in accordance with the terms of the policy, unless, before such payment, the company has received written notice, from a creditor, executor or administrator of the insured, that the policy was procured or premiums were paid thereon with intent to defraud creditors. That notice may be disregarded by the company unless proper legal proceedings to enforce the claim are begun within three months from the giving of the notice.’ ”

229 Conn, at 462 n. 5, 642 A.2d at 6 n. 5.

The Court pointed out that “ § 38a-453(c) applies where the ‘policy was procured or the premiums were paid thereon with intent to defraud creditors’ of the insured, circumstances not alleged in this case. Section 38a-453(c) is therefore inap-posite.” 229 Conn, at 464 n. 7, 642 A.2d at 7 n. 7.

LYONS, Justice

(dissenting).

I must respectfully dissent.

The main opinion, relying upon § 27-14-24, Ala.Code 1975, holds that an insurer paying the proceeds of a life-insurance policy to a beneficiary whose right to those proceeds is derived from a forged change-of-beneficiary form is discharged from further liability under a life-insurance policy when it makes a payment to such a beneficiary in good faith and without notice. Whether it would be sound public policy for the legislature to protect an insurer under these circumstances is a question not before us. The only question before us is whether § 27-14-24, as written, affords an insurer such protection.

Section 27-14-24 provides as follows:

“Whenever the proceeds of, or payments under, a life or disability insurance policy or annuity contract, heretofore or hereafter issued, become payable in accordance with the terms of such policy or contract, or the exercise of any right or privilege thereunder, and the insurer makes payment thereof in accordance with the terms of the policy or contract or in accordance with any written assignment thereof, the person then designated in the policy or contract, or by such assignment, as being entitled thereto shall be entitled to receive such proceeds or payments and to give full acquittance therefor; and such payments shall fully discharge the insurer from all claims under the policy or contract, unless, before payment is made, the insurer has received at its home office written notice by, or on behalf of, some other person that such other person claims to be entitled to such payment or some interest in the policy or contract.”

(Emphasis added.)

The terms of the policy here provide as follows:

“CHANGE OF BENEFICIARY: The beneficiary designation contained in the application will remain in effect until changed. The Oumer may change the beneficiary any time during your, lifetime. A satisfactory written notice must be filed at the home office. The change would take effect only upon being recorded by [Fortis].”

(Emphasis added.) The policy therefore quite plainly provides that only the owner can change the beneficiary designation. For purposes of this appeal we have assumed that the owner — Jay Pinkley — never changed the designation of the beneficiary and that the change-of-beneficiary form was a forgery.

The main opinion treats § 27-14-24 as sufficient to protect the insurer, notwithstanding that for purposes of this appeal we have assumed that the change-of-beneficiary form was completed in a manner inconsistent with the terms of the policy. The main opinion dismisses the phraseology in § 27-14-24 (“Whenever the proceeds of, or payments under, a life or disability insurance policy or annuity contract, heretofore or hereafter issued, become payable in accordance with the terms of such policy or contract ....”) by concluding that “ ‘whenever’ an event triggers the insurer’s duty to pay and payment is made to ‘the person’ whose name appears on the face of the policy or any change to the policy in regular form as the proper beneficiary, payment has been made ‘in accordance with the terms of [the] policy.’ ” 926 So.2d at 989. I respectfully submit that such a construction of § 27-14-24 would be appropriate only in the event that section read as follows:

“Whenever the proceeds of, or payments under, a life or disability insurance policy or annuity contract, heretofore or hereafter issued, appear to have become payable in accordance with the terms of such policy or contract, or the exercise of any right or privilege thereunder, and the insurer makes payment thereof in apparent accordance with the terms of the policy or contract or in apparent accordance with any written assignment thereof, the person then designated in the policy or contract, or by such assignment, as being apparently entitled thereto shall be entitled to receive such proceeds or payments and to give full acquittance therefor; and such payments shall fully discharge the insurer from all claims under the policy or contract, unless, before payment is made, the insurer has received at its home office written notice by, or on behalf of, some other person that such other person claims to be entitled to such payment or some interest in the policy or contract.”

(Changed language emphasized.)

Section 27-14-24, as written, contemplates that under certain circumstances benefits might be paid to someone with a claim to those benefits inferior to the claim of another. The statute protects an insurer under certain circumstances when it makes such a payment without having received notice of a claim by a person other than the named beneficiary. As written, § 27-14-24 is broad enough to protect an insurer when it receives a change-of-beneficiary form executed by the insured, makes payment pursuant to the form, and it is later determined that the owner of the policy was incompetent at the time he or she executed the form. I consider that circumstance to be distinguishable from the one presented here. Although in such a scenario the owner of the policy was incompetent, the signature on the form is that of the owner, and it cannot be said that the change-of-beneficiary form was executed in a manner inconsistent with the literal terms of the policy because the owner’s signature is all the terms of the policy required. Suppose the policy provided, “The Owner may change the beneficiary at any time during your lifetime so long as you are at that time mentally competent.” (Emphasis added.) Because § 27-14-24 requires that the payment must be “in accordance with the terms of [the] policy” I submit that an insurer making payment without verification of mental competency would not be entitled to protection.

Nevertheless, as written, § 27-14-24 is simply not broad enough to protect the insurer under the circumstances here presented, where noncompliance with the literal terms of the policy is undisputed and compliance with the terms, merely apparent to the insurer at the time of payment, was not real. I must therefore respectfully dissent.

      . For the purpose of this appeal, we assume that the signature was forged.

      . Indeed, Pinkley concedes that it would be necessary to "analyz[e] the pressure points made by the pen within the signature” on the original of the request form "under a microscope in order to determine [conclusively] whether [it] was authentic.” Pinkley’s brief, at 50.


source: Caselaw Access Project

author: SEE, Justice.

license: Public Domain

text:
    GULF COAST REALTY COMPANY, INC., d/b/a Gulf Coast Reservations and McLaurin Unlimited v. PROFESSIONAL REAL ESTATE PARTNERS, INC., d/b/a Century 21 Professional Partners. Gulf Coast Realty Company, Inc., d/b/a Gulf Coast Reservations and McLaurin Unlimited v. Admiral’s Quarters Associates, L.L.C. Gulf Coast Realty Company, Inc., d/b/a Gulf Coast Reservations and McLaurin Unlimited v. Tidewater Associates, L.L.C.
    1031924, 1031926, and 1031928.
    Supreme Court of Alabama.
    Aug. 12, 2005.
    Rehearing Denied Nov. 10, 2005.

      Daniel G. Blackburn and Cynthia J. Sherman of Blackburn & Conner, P.C., Bay Minette, for appellant.
    Edward A. Dean and Mary Carol Ladd of Armbrecht Jackson, LLP, Mobile, for appellees.
   SEE, Justice.

The Baldwin Circuit Court entered summary judgments in favor of Professional Real Estate Partners, Inc., d/b/a Century 21 Professional Partners (CV-02-1219), Admiral’s Quarters Associates, L.L.C. (CV-03-253), and Tidewater Associates, L.L.C. (CV-03-254). Gulf Coast Realty, Inc., d/b/a Gulf Coast Reservations and McLaurin Unlimited, appeals from those judgments. We affirm the judgments for Admiral’s Quarters and Tidewater; we affirm in part and reverse in part the judgment for Professional Real Estate.

I. Facts

On October 25, 1999, Professional Real Estate Partners, Inc., d/b/a Century 21 Professional Partners (“Professional Real Estate”), and Gulf Coast Realty, Inc., d/b/a Gulf Coast Reservations and McLaurin Unlimited (“Gulf Coast Realty”), entered into a written agreement (“the agreement”). The agreement states that Professional Real Estate and/or Rick Phillips, its president, planned to develop four condominium projects, including the Admiral’s Quarters condominiums and the Tidewater condominiums. The agreement provides, among other things, that (1) for five years, Gulf Coast Realty will pay Professional Real Estate a certain percentage of the gross rentals or gross commission from rentals, depending on Gulf Coast Realty’s seasonal commission rate; and (2) for five years from the date of the agreement, Professional Real Estate will assist and cooperate in Gulf Coast Realty’s efforts to become the rental agent for purchasers of the condominium units. The provisions of the agreement that give rise to the underlying dispute in these cases are paragraphs 5 and 6, which read in full as follows:

“5) With reference to the projects described on Exhibit ‘A’, [which include Admiral’s Quarters condominiums and Tidewater condominiums], a copy of which is attached hereto and made a part hereof as if fully set out herein, [Professional Real Estate] shall lease to [Gulf Coast Realty] ground floor office space and storage space for cleaning and maintenance in the Condominium projects. [Professional Real Estate] shall exclusively authorize and permit ownership and/or lease of the facility to [Gulf Coast Realty] to use such facility for any legal purpose including, but not limited to, a rental and/or management office, and it’s [sic] pro rata share of common areas and parking subject to the other terms and conditions of the condominium documents, and paying its pro rata share of condominium fees. The condominium documents shall also contain the right to allow [Gulf Coast Realty] to place reasonable signage at the entrance of the project, on the office and directional signage in the parking area directing renters to its’s [sic] office and advising the public that facilities are for rent.
“6) [Gulf Coast Realty] shall pay the sum of Ten ($10.00) Dollars per annum to [Professional Real Estate], plus the payment of condo dues and assessments, if any to [Professional Real Estate] for rental of this office area and shall have an option to purchase the area at any time within five (5) years of the commencement of the lease, the purchase price to be One Hundred ($100.00) Dollars per square foot of the office areas leased, payable in cash at closing. Exercise of the option must be given in writing by [Gulf Coast Realty] to [Professional Real Estate] no less then [sic] thirty (30) days before the end of the five (5) years and closing shall be within thirty (30) days of receipt of the notice to [Professional Real Estate.]”

The agreement is signed by Rick Phillips, as the president of Professional Real Estate and by Thomas M. Marr, Jr., as the president of Gulf Coast Realty.

The Admiral’s Quarters condominiums and the Tidewater condominiums apparently were developed by and are owned by Admiral’s Quarters Associates, L.L.C. (“Admiral’s Quarters”), and Tidewater Associates, L.L.C. (“Tidewater”), respectively — not by Professional Real Estate or by Rick Phillips individually, as was contemplated by the agreement. Rick Phillips is a member of and owns a 50% interest in both Admiral’s Quarters and Tidewater.

Gulf Coast Realty has occupied the office condominium unit at the Admiral’s Quarters condominiums and at the Tidewater condominiums and has paid Professional Real Estate certain sums due under paragraph 2 of the agreement. However, Professional Real Estate asserts that Gulf Coast Realty never paid the $10 annual rental for the office space and did not timely pay dues and assessments that Professional Real Estate says were owed under paragraph 6 of the agreement.

On October 25 and 29, and again on October 31, 2002, Professional Real Estate, Rick Phillips, and Tidewater notified Gulf Coast Realty in writing that its tenancy and possessory rights in the office unit at the Tidewater condominiums were being terminated because it had breached the agreement. Also on October 25, 29, and 31, 2002, Professional Real Estate, Rick Phillips, and Admiral’s Quarters notified Gulf Coast Realty that its tenancy and possessory rights in the office unit at Admiral’s Quarters condominiums were being terminated because it had breached the agreement. On October 28, 2002, the law firm representing “Professional Real Estate Partners, Inc., d/b/a Century 21 Professional Partners, Inc., and Rick A. Phillips” notified Gulf Coast Realty in writing that it was in default of the agreement for “among other reasons failure to comply with paragraphs 2, 5, and 6 of the agreement” and “[a]s a consequence, the agreement is terminated and no performance on the part of Professional Real Estate Partners, Inc., d/b/a Century 21 Professional Partners, Inc., and Rick A. Phillips is due.”

On December 2, 2002, a letter signed by the “Attorney for [the] Owner” was delivered to Gulf Coast Realty demanding that Gulf Coast Realty leave and deliver possession of the commercial unit at the Tidewater condominiums “to me or my Agent (Century 21 Professional Partners).” Also on December 2, 2002, a letter signed by the “Attorney for [the] Owner” was delivered to Gulf Coast Realty demanding that Gulf Coast Realty leave and deliver possession of the commercial unit at the Admiral’s Quarters condominiums “to me or my Agent (Century 21 Professional Partners).” Gulf Coast Realty did not deliver possession of either of the office units.

II. Procedural History

A. Appeal no. 1031921 — Gulf Coast Realty v. Professional Real Estate (CV-02-1219)

On November 12, 2002, after receiving notice that its tenancy was terminated and that it was considered in default of the agreement, Gulf Coast Realty brought an action against Professional Real Estate in the Baldwin Circuit Court seeking a judgment declaring that Professional Real Estate was prohibited from terminating Gulf Coast Realty’s tenancy in the office units at the Admiral’s Quarters condominiums and the Tidewater condominiums. Gulf Coast Realty later amended its complaint to include a claim seeking specific performance of Gulf Coast Realty’s option to purchase the office units at the Admiral’s Quarters condominiums and the Tidewater condominiums. Gulf Coast Realty did not name Admiral’s Quarters or Tidewater— the owners of the condominiums — as defendants in its original complaint or in its first amended complaint, filed on December 6, 2002.

In September 2003, the trial court set trial for November 3, 2003. On October 27, 2003, Professional Real Estate moved for a summary judgment. The initial trial date of November 3, 2003, was continued to December 16, 2003, and then again to sometime in March 2004. On January 9, 2004, Gulf Coast Realty moved for leave to file a second amended complaint. Gulf Coast Realty’s second amended complaint would have added Admiral’s Quarters and Tidewater as defendants in the declaratory-judgment action and would have added alternative claims of breach of contract and fraud under the theory that Professional Real Estate was an agent for undisclosed principals — Admiral’s Quarters and Tidewater — when it entered into the agreement.

On January 13, 2004, the trial court heard Professional Real Estate’s summary-judgment motion. On January 29, 2004, the trial court entered a summary judgment in favor of Professional Real Estate on Gulf Coast Realty’s claim for specific performance of the alleged purchase option “because the option was not supported by consideration.” On August 10, 2004, the trial court entered a summary judgment in favor of Professional Real Estate on Gulf Coast Realty’s claim seeking a judgment declaring that Professional Real Estate could not terminate its possessory rights. The trial court did not rule on Gulf Coast Realty’s motion for leave to file a second amended complaint. Gulf Coast Realty appeals the summary judgment.

B. Appeals no. 1031926 and no. 1031928 — Admiral’s Quarters v. Gulf Coast Realty (CV-03-253) and Tidewater v. Gulf Coast Realty (CV-0325k)

On December 16, 2002, Admiral’s Quarters and Tidewater brought separate eviction actions against Gulf Coast Realty in the Baldwin District Court. Pursuant to Ala.Code 1975, § 35-9-85, Gulf Coast Realty responded to the eviction actions by filing in each case a counter-affidavit of Thomas Marr, Jr. In that affidavit, Marr asserted that Gulf Coast Realty had previously instituted an action against Professional Real Estate seeking a declaration that Gulf Coast Realty maintains a valid option under the agreement to purchase the office units at the Admiral’s Quarters condominiums and the Tidewater condominiums. In each case, the district court entered a “judgment for landlord.” The district court also entered writs of possession commanding the sheriff to restore possession of the office unit at the Admiral’s Quarters condominiums to Admiral’s Quarters and the office unit at the Tidewater condominiums to Tidewater. Gulf Coast Realty appealed both judgments to the Baldwin Circuit Court.

In the appeals to the Baldwin Circuit Court, Admiral’s Quarters and Tidewater amended the complaints they had filed in the district court. Admiral’s Quarters and Tidewater contended in their amended complaints (1) that, pursuant to Ala.Code 1975, § 35-9-1, Gulf Coast Realty cannot maintain possession while claiming the right to exercise an option to purchase; (2) that there is no valid option to purchase because Admiral’s Quarters and Tidewater did not sign the agreement containing the option; and (3) that the option is void because it is not supported by separately stated consideration. Admiral’s Quarters and Tidewater moved for summary judgments. The circuit court judges entered summary judgments in favor of Admiral’s Quarters and Tidewater. Gulf Coast Realty appeals both judgments.

We consolidated the three appeals for purposes of writing one opinion.

III. Standard of Review

Our review of a summary judgment is de novo.

“In reviewing the disposition of a motion for summary judgment, ‘we utilize the same standard as the trial court in determining whether the evidence before [it] made out a genuine issue of material fact,’ Bussey v. John Deere Co., 531 So.2d 860, 862 (Ala.1988), and whether the movant was ‘entitled to a judgment as a matter of law.’ Wright v. Wright, 654 So.2d 542 (Ala.1995); Rule 56(c), Ala. R. Civ. P. When the movant makes a prima facie showing that there is no genuine issue of material fact, the burden shifts to the nonmovant to present substantial evidence creating such an issue. Bass v. SouthTrust Bank of Baldwin County, 538 So.2d 794, 797-98 (Ala.1989). Evidence is ‘substantial’ if it is of ‘such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved.’ Wright, 654 So.2d at 543 (quoting West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala. 1989)). Our review is further subject to the caveat that this Court must review the record in a light most favorable to the nonmovant and must resolve all reasonable doubts against the movant. Wilma Corp. v. Fleming Foods of Alabama, Inc., 613 So.2d 359 (Ala.1993); Hanners v. Balfour Guthrie, Inc., 564 So.2d 412, 413 (Ala.1990).”

Hobson v. American Cast Iron Pipe Co., 690 So.2d 341, 344 (Ala.1997).

IV. Discussion

A. Gulf Coast Realty v. Professional Real Estate (Appeal no. 1031921)

1.

Gulf Coast Realty sought a judgment declaring that Professional Real Estate is obligated to convey the office units at the Admiral’s Quarters condominiums and the Tidewater condominiums to Gulf Coast Realty, pursuant to the option contained in paragraph 6 of the agreement. In entering a summary judgment in favor of Professional Real Estate on this claim, the trial court found that “the purported option was not supported by consideration.” Gulf Coast Realty argues that the trial court erred in concluding that the option was not supported by consideration. Gulf Coast Realty argues that the option was supported by consideration in that the agreement contained “mutual covenants” that the parties recognized as “advantageous to each.” Specifically, Gulf Coast Realty points to its various obligations under the contract, such as its promise to pay Professional Real Estate five percent of rentals for five years, to pay referral fees to Professional Real Estate’s agents, to pay Professional Real Estate $10 a year in rent, and to pay Professional Real Estate condominium dues and assessments. Gulf Coast Realty does not and cannot point to any provision of the contract as a statement of separate consideration for the option, but argues that the parties are not obligated to “match each element of consideration to a specific promise.”

In support of its finding that the option is not supported by consideration, the trial court cited Foy v. Foy, 484 So.2d 439 (Ala.1986), in which the following statement, which supports the trial court’s conclusion, appears:

“ ‘The consideration for the option is a thing apart from the consideration for the sale of the land. There must be some consideration on which the finger may be placed and of which it may be said, “this was given by the proposed purchaser to the proposed vendor, as the price for the option, or privilege to purchase.” ...’”

484 So.2d at 442 (quoting 77 Am.Jur.2d Vendor and Purchaser § 34 at 214 (1975)). Professional Real Estate relies on Foy and Armstrong Business Services, Inc. v. AmSouth Bank, 817 So.2d 665 (Ala.2001), in support of its argument that the purchase option in the agreement is void for lack of consideration.

Foy and Armstrong, however, are distinguishable from this case. In Foy, this Court considered an attempt by one family member to compel another family member to specifically perform an option contract allowing the first to purchase certain real estate from the other. The Court emphasized the requirement of the Statute of Frauds that the option agreement itself contain a statement of the consideration. (“We agree with the trial court’s finding that the option contract here, which falls within the Statute [of Frauds], ... contained no statement in writing expressing the consideration for the option itself.” 484 So.2d at 442.) After reciting the pertinent provision from the contract, this Court concluded that the option contract contained no statement of any consideration for the option itself, stating: “The monetary figure expressed, $18,637.50, refers not to the option contract but to the consideration to be paid in the future for the deed of the land to be purchased. That transaction has nothing to do with the unilateral option contract.” 484 So.2d at 442-43. Because the contract did not state the consideration for the option, the Court affirmed the trial court’s judgment holding that the option was contrary to the Statute of Frauds because it contained no statement in writing expressing the consideration for the option itself. Significantly, the contract in Foy was only an option contract; the seller had the obligation to convey if the purchaser remitted the $18,637.50; however, the purchaser had no obligation under the option contract to make any payment, to tender the $18,637.50, or to do or refrain from doing anything else.

In Armstrong Business Services, this Court reviewed a trial court’s conclusion that a loan commitment was void under the Statute of Frauds because there was no writing expressing consideration for a commitment by AmSouth Bank to lend money to Armstrong. An enforceable loan commitment is treated as an option contract purchased by the prospective borrower. 817 So.2d at 674 (citing Peterson Dev. Co. v. Torrey Pines Bank, 233 Cal. App.3d 103, 284 Cal.Rptr. 367 (1991); Capital Holding Corp. v. Octagon Dev. Co., 757 S.W.2d 202 (Ky.Ct.App.1988); and Analytical Design & Constr. Group, Inc. v. Murray, 690 P.2d 269 (Colo.Ct.App.1984)). Thus, the Court considered whether under Foy the purported loan commitment violated the Statute of Frauds and was void for failing to state consideration. It held that the loan commitment was void.

As in Foy, the purported option in Armstrong Business Services (loan commitment) would have bound AmSouth to loan money to Armstrong Business Services, but Armstrong Business Services had no obligation under the agreement. The requirement appearing in Foy and Armstrong Business Services of a separate expression of consideration for an option applies only to option contracts that are nudum pactum on their face, that is, those contracts that constitute only gratuitous promises by the would-be seller and thus fail for lack of consideration. Thus, Foy and Armstrong are distinguishable from this case in that the purchaser here, Gulf Coast Realty, did have duties under the contract. We conclude that those duties constitute consideration for the option.

In Rice v. Sinclair Refining Co., 256 Ala. 565, 56 So.2d 647 (1952), this Court addressed a situation factually similar to that presented by the case before us today. In Rice, this Court considered the argument that an option to purchase contained in a lease is distinct from the provisions of the contract that relate to the lease, and that no separate consideration was provided to support the option agreement. The Court held that the option was supported by consideration because “payment of rental under the contract is sufficient to support the option to purchase under the contact so that it cannot be withdrawn during the period specified for its continuance.” 256 Ala. at 573, 56 So.2d at 653 (citing Davis v. Robert, 89 Ala. 402, 8 So. 114 (1890); 32 Am.Jur. p. 278). In addition, “[w]hen an option is accepted there arises a binding contract to sell and convey founded on valuable consideration where rent is paid during the term.” 256 Ala. at 573, 56 So.2d at 653 (citing New Brunswick Fire Ins. Co. v. Nichols, 210 Ala. 63, 97 So. 82 (1923); Moorer v. Tensaw Land & Timber Co., 246 Ala. 223, 20 So.2d 105 (1944)). See also Furse v. Timber Acquisition, 303 S.C. 388, 390, 401 S.E.2d 155, 156 (1991) (“[A]s to option contracts, the general rule is that leases frequently contain provisions conferring upon the lessee the option to purchase the premises. The provision in a lease for specified payments by the lessee to the lessor is consideration for an option to purchase contained in the lease, although the consideration is unseparated from that given for occupation of the property.” (citation omitted)); Amann v. Frederick, 257 N.W.2d 436, 439 (N.D.1977) (“[CJonsider-ation for an option can be supplied by the consideration for a lease in the same instrument.”).

Gulf Coast Realty’s option to purchase the office units at the Admiral’s Quarters condominiums and the Tidewater condominiums is not void as nudum pactum. The agreement provides that Gulf Coast Realty and Professional Real Estate had “determined that the terms of [the] Agreement [were] advantageous to each,” and “in consideration of the mutual covenants ... contained [in the written agreement], the receipt and sufficiency whereof [were thereby] acknowledged,” the two parties agreed that Gulf Coast Realty would pay referral fees, condominium fees, $10 per year, and a certain percentage of the rent or commissions collected from owners of condominium units (depending upon the particular unit rented). In return, Professional Real Estate promised to refer to Gulf Coast Realty new and potential owners of condominium units, to lease to Gulf Coast Realty both office and storage space, to allow Gulf Coast Realty to put its signs in and around the condominiums, to furnish the leased space, and to give Gulf Coast Realty an option to purchase that space.

Thus, we conclude that the agreement states consideration for the option and that, therefore, the option is not void under the Statute of Frauds. The trial court erred in concluding that the option is void for lack of consideration and in entering a summary judgment in favor of Professional Real Estate on Gulf Coast Realty’s claim for specific performance of its options to purchase the office units at the Admiral’s Quarters condominiums and at the Tidewater condominiums. We therefore reverse the trial court’s judgment on this claim.

2.

Gulf Coast Realty also sought a judgment declaring that it had complied with its obligations under the agreement and that Professional Real Estate was therefore prohibited from terminating its tenancies in the condominiums. The trial court entered a summary judgment in favor of Professional Real Estate on this claim, finding “that the tenancies were properly terminated as a matter of undisputed material fact and law.” We conclude in Part B of this opinion, in our discussion of the eviction actions, that Admiral’s Quarters and Tidewater, the owners of the Admiral’s Quarters condominiums and the Tidewater condominiums, properly terminated Gulf Coast Realty’s tenancy in the condominiums. Therefore, we hold that the trial court did not err in entering a summary judgment against Gulf Coast Realty on its claim for a judgment declaring that the tenancies had been improperly terminated.

3.

Gulf Coast Realty argues that the trial court erred in denying its motion for leave to file a second amended complaint in the declaratory-judgment action. Rule 15(a), Ala. R. Civ. P., provides, in pertinent part, as follows:

“(a) Amendments. Unless a court has ordered otherwise, a party may amend a pleading without leave of court, but subject to disallowance on the court’s own motion or a motion to strike of an adverse party, at any time more than forty-two (42) days before the first setting of the case for trial, and such amendment shall be freely allowed when justice so requires. Thereafter, a party may amend a pleading only by leave of court, and leave shall be given only upon a showing of good cause.... ”

The case was first set to be tried on November 3, 2003. Gulf Coast Realty’s January 9, 2004, motion for leave to file a second amended complaint clearly was not filed “more than forty-two (42) days before the first setting of the case for trial”; the motion was made well after the first setting of the case for trial. Therefore, Gulf Coast Realty could amend its pleading only by leave of court, which “shall be given only upon a showing of good cause.” See Rule 15(a), Ala. R. Civ. P.

“ ‘Although Rule 15(a) itself calls for liberal amendment, this Court has held consistently that “the grant or denial of leave to amend is a matter that is within the discretion of the trial court and is subject to reversal on appeal only for an abuse of discretion.” ’ ” Rector v. Better Houses, Inc., 820 So.2d 75, 78 (Ala.2001) (quoting Boros v. Baxley, 621 So.2d 240, 245 (Ala.1993)). “‘Rule 15, [Ala. R. Civ. PJ, is not carte blanche authority to amend a complaint at any time.’ ” Rector, 820 So.2d at 78 (quoting Stallings v. Angelica Uniform Co., 388 So.2d 942, 947 (Ala. 1980), quoting in turn Stead v. Blue Cross-Blue Shield of Alabama, 294 Ala. 3, 6, 310 So.2d 469, 471 (1975)). “ ‘Discretion rests in the trial judge to deny amendments for good cause.... “[I]f the court determines ... that a party has had sufficient opportunity to state a claim or revise his answer to a complaint but has failed to do so, leave to amend may properly be denied.” ’ ” Ex parte Tidmore, 418 So.2d 866, 868-69 (Ala. 1982) (quoting Stallings, 388 So.2d at 947).

In its motion for leave to file its second amended complaint, Gulf Coast Realty did not specifically address whether it had “good cause” to amend its complaint. However, it stated that the ground for its motion was that Professional Real Estate, the only defendant, had “recently” moved for a summary judgment arguing that it was not the owner of the condominiums, but that Admiral’s Quarters and Tidewater were the owners.

We first note that Professional Real Estate had moved for a summary judgment over two months before Gulf Coast Realty moved for leave to amend. Moreover, Gulf Coast had had a “sufficient opportunity” to amend its complaint even before Professional Real Estate moved for a summary judgment. Gulf Coast Realty sought to amend its complaint to add Admiral’s Quarters, Tidewater, and Rick Phillips as defendants and to add additional claims of fraud and breach of contract. Gulf Coast Realty should have been aware that Admiral’s Quarters and Tidewater, not Professional Real Estate, were the owners of the condominiums at least as early as December 2002, when Admiral’s Quarters and Tidewater instituted eviction actions against Gulf Coast Realty. “[U]n-due delay in filing an amendment, when it could have been filed earlier based on the information available or discoverable, is in itself ground for denying an amendment.” Puckett, Taul & Underwood, Inc. v. Schreiber Corp., 551 So.2d 979, 984 (Ala. 1989). Thus, the trial court could have properly determined that Gulf Coast Realty did not show “good cause” for filing an amendment to its complaint in January 2004. The trial court did not exceed its discretion in denying Gulf Coast Realty’s motion for leave to amend.

B. The Eviction Actions: Admiral’s Quarters v. Gulf Coast Realty (Appeal no. 1031926) and Tidewater v. Gulf Coast Realty (Appeal no. 1031928)

In entering a summary judgment in favor of Admiral’s Quarters in its eviction action against Gulf Coast Realty, the trial court stated:

“[Gulf Coast Realty is] in possession of the [office unit at Admiral’s Quarters]. [Gulf Coast Realty] unlawfully detained the premises after termination of [Gulf Coast Realty’s] possessory interest and after [Admiral’s Quarters’] demand therefor more than ten (10) days before commencing this action.”

In entering a summary judgment in favor of Tidewater in its separate eviction action against Gulf Coast Realty, the trial court made the same statement.

On appeal, Gulf Coast Realty argues that the trial courts in both eviction actions erred in entering summary judgments in favor of Admiral’s Quarters and Tidewater because, Gulf Coast Realty argues, there were questions of fact as to whether Gulf Coast Realty unlawfully detained the office units in the Admiral’s Quarters condominiums and the Tidewater condominiums. Specifically, Gulf Coast Realty asserts that it presented evidence creating a genuine issue of material fact as to whether it had paid the $10 annual rent due Professional Real Estate under paragraph 6 of the agreement.

However, whether Gulf Coast Realty paid the rent in accordance with the terms of the agreement is immaterial if Admiral’s Quarters and Tidewater were entitled to terminate Gulf Coast Realty’s possessory interest even in the absence of a breach of the agreement.

Admiral’s Quarters and Tidewater argue that the summary judgments are due to be affirmed because the agreement provides for a month-to-month or year-to-year lease and they gave Gulf Coast Realty proper notice of termination of the lease. Gulf Coast Realty argues that the trial court could not properly enter summary judgments in favor of Admiral’s Quarters and Tidewater because, it says, the agreement specifies a lease term of five years, which had not expired when Admiral’s Quarters and Tidewater attempted to terminate the lease, and that, therefore, it was not in wrongful possession and could not be evicted. Alternatively, Gulf Coast Realty argues that there is a genuine issue of material fact as to the term of the lease and that, therefore, the trial court could not enter a summary judgment in favor of Admiral’s Quarters and Tidewater on the ground that Gulf Coast Realty was in wrongful possession of the office units.

We first consider Gulf Coast Realty’s assertion that the agreement specifies a lease term of five years. “ ‘It is well settled that a court in seeking to ascertain the intention of the parties in construing a contract, will consider the contract as a whole, although the immediate object of the inquiry is the meaning of a particular clause. Further, a contract must be construed as a whole and, whenever possible, effect must be given to all its parts.’ ” West Town Plaza Assocs., Ltd. v. Wal-Mart Stores, Inc., 619 So.2d 1290, 1294 (Ala.1993) (quoting Land Title Co. of Alabama v. State ex rel. Porter, 292 Ala. 691, 698, 299 So.2d 289, 295 (1974)). Construing the agreement as a whole and giving effect to the only two provisions that reference a five-year period, we cannot agree with Gulf Coast Realty that the agreement specifies a lease term of five years.

In support of its argument that the agreement specifies a lease term of five years, Gulf Coast Realty cites paragraph 2 of the agreement, which provides, generally, that Gulf Coast Realty shall pay Professional Real Estate a percentage of rentals received by Gulf Coast Realty for a period of five years. We are unpersuaded by this argument. Paragraph 2 does not indicate that this five-year arrangement is related to the lease of an office unit at the Admiral’s Quarters condominiums or the Tidewater condominiums. Gulf Coast Realty and Professional Real Estate could perform its duties under paragraph 2 of the agreement regardless of whether Gulf Coast Realty occupied office space in the Admiral’s Quarters condominiums and the Tidewater condominiums.

Gulf Coast Realty also argues that it is reasonable to interpret the agreement as providing for a lease term of five years because the option to purchase set forth in paragraph 6 of the agreement extended for five years. We cannot agree with Gulf Coast Realty that paragraph 6 indicates a lease term of five years. Gulf Coast Realty could hold this option to purchase for five years without leasing the office unit during that period. Neither paragraph 2 nor paragraph 6 nor the agreement as a whole supports Gulf Coast Realty’s contention that the agreement provides a lease term of five years.

Gulf Coast Realty alternatively argues that the agreement is ambiguous as to the term of the lease and, thus, the term of the lease is a question of fact for the jury. “The general rule is that this Court will ‘construe [a] lease according to the parties’ intention as gathered from the whole instrument, and, if the language is not clear, the circumstances attending its execution and the subsequent acts of the parties.’ ” West Town Plaza Assocs., 619 So.2d 1290 at 1294 (quoting Irwin v. Baggett, 231 Ala. 324, 326, 164 So. 745, 746 (1935)). We have reviewed the agreement as a whole, and we conclude that it does not specify a lease term of five years. We further conclude that the agreement is not unclear or ambiguous as to the lease term; instead, the agreement is silent as to the term of the lease.

“If the court determines that the terms [of a contract] are unambiguous (susceptible of only one reasonable meaning), then the court will presume that the parties intended what they stated and will enforce the contract as written.” Homes of Legend, Inc. v. McCollough, 776 So.2d 741, 746 (Ala.2000). “[I]n the absence of ambiguity the court cannot interpret the contract but must take it as it is written.” Darling Shop of Birmingham, Inc. v. Nelson Realty Co., 255 Ala. 586, 591, 52 So.2d 211, 215 (1951). As written, the agreement does not specify a term of the lease. The law recognizes that parties may agree to a lease for an unspecified term, the consequences of which we address below. See 1 Restatement (Second) of Property: Landlord and Tenant § 1.5 (1977) (“A landlord-tenant relationship may be created to endure until one of the parties has given the required notice to terminate the tenancy at the end of a period.”). Thus, we reject Gulf Coast Realty’s argument that the agreement is ambiguous as to the term of the lease.

Admiral’s Quarters and Tidewater argue, as they did in support of their respective summary-judgment motions, that because the term of the lease is not specified in the agreement, it is presumed to be a monthly or a yearly lease under Ala.Code 1975, § 35-9-4. Thus, they argue that the leases of the office units to Gulf Coast Realty were properly terminated. In response, Gulf Coast Realty argues that § 35-9-4 applies only to the lease of “lodgings or a dwelling house” and that it does not apply to the commercial office units at issue. Although, as Admiral’s Quarters and Tidewater point out, Gulf Coast Realty cites no caselaw in support of its argument that § 35-9-4 is inapplicable in this case, Alabama appellate courts have not had occasion to cite that statute. Moreover, the plain language of the statute indicates that it is not applicable to this case.

Therefore, we turn to the more general statute, Ala.Code § 35-9-3, entitled “Duration of tenancy when time for termination not specified — Generally”:

“Where no time is specified for the termination of tenancy, the law construes it to be from December 1 to December 1 but if it is expressly a tenancy at will, then either party may terminate it at will, by 10 days’ notice in writing.”

The agreement does not specify a time for termination. Thus, Ala.Code 1975, § 35-9-3 treats the lease as terminating on December 1. In other words, the lease creates a periodic tenancy that would end on the December 1 following the commencement of the lease term. “A landlord-tenant relationship may be created to endure until one of the parties has given the required notice to terminate the tenancy at the end of a period.” 1 Restatement (Second) of Property: Landlord and Tenant § 1.5, entitled “Periodic Tenancy.” Whether Admiral’s Quarters and Tidewater gave the required notice to terminate Gulf Coast Realty’s periodic tenancy on December 1 depends upon the length of the period of the tenancy — month-to-month or year-to-year.

“Where the parties enter into a lease of no stated duration and periodic rent is reserved or paid, a periodic tenancy is presumed. The period thus presumed is equal to the interval for which rent is reserved or paid to a maximum periodic tenancy of year to year.”

1 Restatement (Second) of Property: Landlord and Tenant § 1.5, cmt. d.

The agreement in this case provides for rent to be paid annually. Thus, we conclude that the period of the lease is year-to-year, and we consider whether Gulf Coast Realty’s year-to-year tenancy was properly terminated. “[T]he general rule is that, in the absence of an agreement between the parties, a month’s notice prior to the end of the leasehold period, when that period is a month or more, is adequate.” Brown v. Williams, 576 So.2d 195, 197 (Ala.1991) (citing 1 Restatement (Second) of Property: Landlord and Tenant § 1.5(f)). The end of the leasehold period for the office units was December 1. Admiral’s Quarters and Tidewater gave notice on October 25, 29, and 31, 2002; that is, Admiral’s Quarters and Tidewater provided more than a month’s notice before the end of the leasehold period, thereby effectively terminating Gulf Coast Realty’s possessory interest and entitling Admiral’s Quarters and Tidewater to possession of the respective condominium units.

Because Admiral’s Quarters and Tidewater lawfully terminated the respective leases, Admiral’s Quarters and Tidewater were entitled to a judgment as a matter of law in the eviction actions. The trial courts did not err in entering summary judgments in favor of Admiral’s Quarters and Tidewater.

V. Conclusion

In Gulf Coast Realty’s action against Professional Real Estate (appeal no. 1031924), we hold that the trial court did not err in entering a summary judgment in favor of Professional Real Estate on Gulf Coast Realty’s claim seeking a declaration that Professional Real Estate was prohibited from evicting Gulf Coast Realty from the Admiral’s Quarters condominiums and the Tidewater condominiums. We also hold that the trial court did not err in denying Gulf Coast Realty’s motion to amend its complaint. However, the trial court did err in entering a summary judgment in favor of Professional Real Estate on Gulf Coast Realty’s claim seeking specific performance of the option to purchase contained in the agreement. We reverse that portion of the trial court’s summary judgment for Professional Real Estate and remand the case for proceedings consistent with this opinion.

In the eviction proceedings (appeals no. 1031926 and no. 1031928), the trial court did not err in entering summary judgments for Admiral’s Quarters and for Tidewater. Admiral’s Quarters and Tidewater properly terminated the lease. Thus, we affirm those judgments.

1031924 — AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

1031926 — AFFIRMED.

1031928 — AFFIRMED.

NABERS, C.J., and HARWOOD, STUART, and BOLIN, JJ., concur.

      . Paragraph 2 of the agreement reads as follows:
      "[Gulf Coast Realty] will pay [Professional Real Estate] five (5%) percent of the gross rentals less direct cost (including but not limited to, refunds, cancellations, rebates, credit card fees and referral cost) for five (5) years for units which maintain a twenty-five (25%) percent seasonal commission rate with [Gulf Coast Realty]. [Gulf Coast Realty] will pay [Professional Real Estate] twenty (20%) percent of the gross commission from rentals less the direct cost (including, but not limited to, refunds, cancellations, rebates, credit card fees and referral cost) for five (5) years for units which maintain a rate less than twenty-five (25%) seasonal commission rate with [Gulf Coast Realty], This rate shall be valid from the date that each project receives a Certificate of Occupancy from it’s [sic] governing municipality. Said payment shall be made within forty-five (45) days after receipt from [Gulf Coast Realty.]”
      Paragraph 3 provides that Gulf Coast Realty will no longer be obligated to pay these amounts when a condominium unit is resold by a Professional Real Estate agent and the agent receives a referral fee from Gulf Coast Realty for placing the condominium units in Gulf Coast Realty’s rental program.

      . This provision is set out in paragraph 4 of the agreement, which reads as follows:
      "[Professional Real Estate] and Phillips agree that, for a period of five (5) years from the date of this Agreement, they shall make eveiy effort to have [Gulf Coast Realty] manage the Associations of the projects listed on Exhibit *A'[, which include Admiral’s Quarters condominiums and Tidewater condominiums;] however, this final decision to manage any Association shall be the choice of [Gulf Coast Realty] and it's [sic] Directors. If all terms and budgets are acceptable to [Gulf Coast Realty], [Professional Real Estate] and [Gulf Coast Realty] shall enter into a contract for [Gulf Coast Realty] to manage the condominium Association, and maintain the common areas of each of the projects described in Exhibit 'A,' with the fee for each management contract to be reasonable and commensurate with the amounts paid in the geographical area of the location of the condominium.”

      . Thomas Marr, Jr., and his father, Thomas Marr, Sr., are two of several shareholders of Gulf Coast Realty. The agreement was drafted by Maury Friedlander, a law partner of Thomas Marr, Sr.

      . Professional Real Estate asserts that at the January 13, 2004, hearing, the trial court indicated that it intended to deny Gulf Coast Realty’s motion for leave to amend its complaint. The parties agree that by entering a final judgment without permitting the amendment the trial court effectively denied the motion.

      . Section 35-9-84, Ala.Code 1975, "Arrest of proceedings,” provides as follows:
      "The tenant may arrest the proceedings and prevent the removal of himself and goods from the land by declaring on oath that his lease or term of rent has not expired, and that he is not holding possession of the premises over and beyond his term, or that his right of possession has not terminated or been forfeited, and that he still has a good and lawful right to the possession of said premises."
      Section 35-9-85, Ala.Code 1975, "Trial upon delivery of counter affidavit,” provides:
      "If the counter affidavit provided in section 35-9-84 be made and delivered to the sheriff or deputy sheriff or constable, the tenant shall not be removed, but the officer shall immediately return the proceedings to the court which issued said writ or process, and the fact or facts in issue shall be there tried by said court, and shall stand for trial on the third day after the delivery to said sheriff or deputy sheriff or constable of such counter affidavit, Sundays and legal holidays excepted.”

      .The district court's judgment and writ of possession in favor of Admiral's Quarters actually put Admiral's Quarters in possession of the Tidewater condominium; the district court’s judgment and writ of possession in favor of Tidewater put Tidewater in possession of the Admiral's Quarters condominium. There was apparently some confusion in the district court as to which case number was assigned to the Tidewater action and which case number was assigned to the Admiral's Quarters action. The parties do not raise this as an issue. It appears to be the result of clerical errors.

      . Section 35-9-1 provides: "The tenant cannot dispute his landlord's title, nor attorn to another claimant while in possession, except in cases provided otherwise in this Code.”

      . The provision read:
      " ‘KNOW ALL MEN BY THESE PRESENTS, That we, R.E. Foy, Jr. and Jane Loring Foy, do covenant and agree with R.E. Foy, Sr. and wife, Ruth N. Foy, of Dothan, Houston County, Alabama, that if the said R.E. Foy, Sr. or Ruth N. Foy will tender, or cause to be tendered, to us, the said R.E. Foy, Jr. and Jane Loring Foy, at any time during their lifetime the sum of $18,637.50; we will grant, bargain, sell and convey to the said R.E. Foy, Sr. or Ruth N. Foy, with full covenants of warranty, the following property, to-wit: ...' "

        Foy, 484 So.2d at 442-43.

      . The Court further held that any supposed consideration for the option not stated in the writing would not have made the option enforceable. Foy, 484 So.2d at 443.

      . The condominiums are owned by Admiral’s Quarters and by Tidewater, respectively. Professional Real Estate is the party to the agreement, but, as Gulf Coast Realty points out, one need not own property in order to contract to sell it. To satisfy its obligation to convey the property upon Gulf Coast Realty's exercise of the option, Professional Real Estate need only acquire the office units from Admiral’s Quarters and Tidewater before the transfer, a task the agreement apparently contemplates that Professional Real Estate would be able to accomplish. See, e.g., Ballew v. Charter Realty ERA, 603 So.2d 877, 880 (Ala. 1992) ("Alabama law does not require that a seller have good title at the time of contracting for the sale of the land. The seller must have good title when, by the terms of the contract, he is required to do so.” (citing Barksdale v. Temerson, 251 Ala. 495, 497, 38 So.2d5 (1948))).

      . Gulf Coast Reálty alleged in its second amended complaint that, if Admiral’s Quarters and Tidewater were not bound by the agreement, then Professional Real Estate and Phillips had misrepresented that Professional Real Estate had authority to lease the office units to Gulf Coast Realty and provide Gulf Coast Realty an option to purchase Admiral’s Quarters and Tidewater. Alternatively, Gulf Coast Realty alleged that, if Admiral’s Quarters and Tidewater were not bound by the agreement, then Professional Real Estate had breached the agreement by failing to provide a valid lease and a valid option to purchase.

      . Admiral’s Quarters and Tidewater also argue that because they did not sign the agreement they are not bound by it; thus, they argue, Gulf Coast Realty's tenancies at the Admiral’s Quarters condominiums and the Tidewater condominiums were mere tenancies at will and were subject to termination at any time. Gulf Coast Realty argues that Professional Real Estate and Rick Phillips were agents of undisclosed principals — Admiral's Quarters and Tidewater — and that an undisclosed principal who accepts the benefits of a contract signed by its agent is bound by the provisions of the contract.
      We conclude that the summary judgments in favor of Admiral's Quarters and Tidewater were proper because Admiral's Quarters and Tidewater legally terminated Gulf Coast Realty's tenancies; therefore, we need not decide whether the summary judgments were proper on the basis that Admiral's Quarters and Tidewater were not parties to the agreement or whether as undisclosed principals they were bound by the agreement.

      . The full text of paragraph 2 of the agreement is set forth in footnote 1 of this opinion.

      . Section 35-9-4, entitled "[Duration of tenancy when time for termination not specified] — Hiring of lodgings for indefinite term,” reads in full as follows:
      "A hiring of lodgings or a dwelling house for an unspecified term is presumed to have been made for such length of time as the parties adopt for the estimation of the rent. Thus a hiring at a monthly rate of rent is presumed to be for one month. In the absence of any agreement respecting the length of time for the rent, the hiring is presumed to be monthly.”

      . "The lease from period to period described in this section [entitled 'Periodic Tenancy'] traditionally has been referred to as a tenancy from year to year, or a tenancy from month to month, or a tenancy from week to week, depending on the length of the period that is specified.”
      1 Restatement (Second) of Property: Landlord and Tenant § 1.5, cmt. a.

      . Comment d. to the Restatement goes on to say that “[t]he presumption that a periodic tenancy is intended may be rebutted by language or circumstances showing a contrary intent”; however, as we demonstrated above, Gulf Coast Realty’s argument to rebut the presumption of a periodic tenancy — that the lease is a five-year lease — is without merit.

      . The Restatement discusses the prior common-law requirement of six months’ notice and the more modern requirement of one month's notice:
      "In the absence of any provision in the lease in regard to notice to terminate a periodic tenancy, the common law required notice six months prior to the end of the period, if the period is from year to year, and notice equal to the length of the period in other instances. Although the six months' notice requirement remains a reasonable rule in most areas for land leased on a year to year basis for farming or grazing purposes, the common law six months’ notice requirement is no longer reasonable for other types of leases in light of extensive statutory changes as to the period of notice required to terminate a tenancy from year to year. For property not leased for farming or grazing purposes, a month's notice prior to the end of the period, when the period is a month or more, is adequate in all cases, and should be adopted judicially in the absence of an agreement by the parties for some other notice requirement.”

      .As noted above, Gulf Coast Realty further argues that it presented evidence creating a genuine issue of material fact as to whether it has paid the $10 annual rent. However, we have concluded that Admiral’s Quarters and Tidewater were legally entitled to possession of the office units after giving proper notice of termination, whether or not Gulf Coast Realty was in breach of the lease for a failure to pay the $10 annual rent. Therefore, it is immaterial whether the annual rent was in fact paid, and proof that it has been paid does not preclude the entry of summary judgments in favor of Admiral's Quarters and Tidewater.