author: MOORE, Judge. BRYAN, Judge,

text:
    GROVE HILL HOMEOWNERS’ ASSOCIATION, INC. v. William RICE and Laura Rice.
    2100293.
    Court of Civil Appeals of Alabama.
    Nov. 10, 2011.

      Russell C. Balch of Akridge & Balch, P.C., Auburn, for appellant.
    Kenneth J. Mendelsohn, P.C., Montgomery, for appellee.
   MOORE, Judge.

This court’s opinion of July 29, 2011, is withdrawn, and the following is substituted therefor.

Grove Hill Homeowners’ Association, Inc. (“the Association”), appeals from a judgment of the Lee Circuit Court (“the trial court”) declining to issue a permanent injunction enjoining William Rice and Laura Rice from maintaining a driveway on their property that does not comply with § 6.20 of the Grove Hill Subdivision Declaration of Covenants, Conditions, and Restrictions (“the restrictive covenants”).

This is the second time this case has been before this court. See Grove Hill Homeowners’ Ass’n v. Rice, 43 So.3d 609 (Ala.Civ.App.2010) (“Grove Hill ”). In Grove Hill, we set forth the following facts pertinent to the present appeal:

“In 2008, the Rices purchased property and a house located in the Grove Hill subdivision. On April 23, 2008, the Association sent a letter to the Rices welcoming them to the neighborhood. The Association attached a copy of the restrictive covenants to the letter, which also referred the reader to a Web site for further ‘neighborhood information.’ Section 6.20 of the restrictive covenants provides:
“ ‘6.20 Driveways and Sidewalks. All driveways and sidewalks for each Lot or Dwelling shall be constructed of asphalt or concrete. Other materials may be used but only if approved by the [Architectural Review Committee]. All driveways and sidewalks shall be paved; chert, gravel, and loose stone driveways and sidewalks are prohibited. Provided, however, that the foregoing shall not be applicable to any of the roadways within the Development which may constitute Common Areas.’
“(Bold typeface in original.) Section 5.05(a) of the restrictive covenants states that no improvements, including driveways, may be made to the exterior appearance of any lot without preapproval of the Architectural Review Committee (‘the ARC’).
“At the time the Rices purchased the property, the construction of the house had not been completed, the house had been abandoned by the contractor for four months, and the house was in foreclosure. The contractor had built a narrow concrete driveway running from the street to the house. William testified that, at the time the Rices purchased the property, the driveway was stained with red mud and contained a long crack. No one from the Association or the ARC instructed the Rices that the driveway needed to be repaired or remodeled, but Laura told William that they needed to do something to correct the ‘eyesore.’
“William testified that he considered several options to address the driveway problem, some of which he considered too expensive and others of which he deemed impractical. The Rices decided not to completely replace the driveway; instead, they decided to add a secondary pad to the driveway and to top the driveway with liquid asphalt and loose pea gravel.[] Under that plan, the driveway would retain its original concrete base. They contracted with a landscaping company, which performed the work. In violation of § 5.05 of the restrictive covenants, the Rices did not notify the ARC and obtain its approval before undertaking the modifications to the driveway.
“In late November or early December 2008, John Price, the president of the Association, received an anonymous complaint about the driveway. Barbara Arrington, the property manager, sent an e-mail to William asking whether the driveway had been completed. After receiving information that the driveway had been completed, Price contacted Jack Downs, then chairman of the ARC, about the issue. Downs inspected the driveway and opined to the members of the Association’s board at a December 2008 meeting that the driveway did not comply with § 6.20.
“In January 2009, Diane Tillery assumed the role of ARC chairman from Downs. Tillery talked with the Rices and showed them the restrictive covenants. Tillery testified that, during that meeting, the Rices asked for a variance. Tillery agreed to discuss the matter with the ARC. The Rices thereafter submitted a survey of 21 neighbors, all of whom approved of the driveway, along with photographs of the driveway before the modifications and a description of the modification process. Tillery and the other four members of the ARC inspected the driveway. The ARC subsequently met and unanimously decided that the driveway did not comply with § 6.20. Tillery testified that the ARC did not discuss granting the Rices a variance; however, a letter dated January 19, 2009, which the Association introduced into evidence, indicates that the ARC rejected the Rices’ request for the variance.
“Over the next month, Tillery exchanged e-mails and letters with the Rices and Laura’s father, an attorney. The Rices sought a face-to-face meeting with the ARC to discuss their view that the modifications had actually improved the condition of the driveway, but the ARC did not agree to any ‘appeal.’ The Association, on the other hand, sought information on the Rices’ plans to remodel the driveway in compliance with § 6.20. After receiving a letter from Laura’s father asking her to quit threatening the Rices, Tillery contacted the Association’s attorney. That attorney filed a complaint against the Rices on April 7, 2009, seeking an injunction and damages. The Rices answered on May 11, 2009, and counterclaimed for attorney fees under the Alabama Litigation Accountability Act (‘the ALAA’). See Ala.Code 1975, §§ 12-19-270 to -276.
“The trial court rejected the Association’s request for a preliminary injunction on May 20, 2009. The case proceeded to trial on June 5, 2009. At the trial, the Association introduced photographs showing loose gravel from the driveway scattered in the street. William admitted that loose gravel from the driveway had gotten onto the street. Tillery testified that the ARC was concerned about that problem as well as the aesthetic difference between the Rices’ driveway and all the other driveways in the neighborhood and its potential impact on property values. Tillery testified that the Association wanted the Rices to comply with § 6.20 no matter the cost or disruption. William testified that it would cost $15,000 to make the changes the Association was demanding and that the Rices had taken no steps to change the driveway.”

43 So.3d at 611-12.

The trial court entered a judgment on July 14, 2009, determining that the driveway was “a concrete driveway covered with asphalt and gravel, a combination not contemplated in the covenant,” determining that the driveway conformed to the covenants, and denying the relief requested by the Association. The Association appealed the trial court’s judgment to this court on August 11, 2009. In Grove Hill, this court set out the standard for issuing a permanent injunction:

“ ‘To be entitled to a permanent injunction, a plaintiff must demonstrate success on the merits, a substantial threat of irreparable injury if the injunction is not granted, that the threatened injury to the plaintiff outweighs the harm the injunction may cause the defendant, and that granting the injunction will not disserve the public interest.’ ”

43 So.3d at 613 (quoting TFT, Inc. v. Warning Sys., Inc., 751 So.2d 1238, 1242 (Ala.1999), overruled on other grounds, Holiday Isle, LLC v. Adkins, 12 So.3d 1173 (Ala.2008)). This court then determined that the trial court had erred in determining that § 6.20 contained a latent ambiguity, and we concluded that the Rices’ driveway violated § 6.20 of the restrictive covenants and, therefore, that the Association had demonstrated success on the merits. 43 So.3d at 615. We reversed the trial court’s judgment and remanded the case for the trial court to consider “whether the Association carried its burden of proving the remaining elements necessary to obtain the permanent injunction it requested.” Id.

Upon remand, the Association filed a motion for the entry of a judgment in its favor. The parties filed briefs on remand in support of their respective arguments, and, on May 28, 2010, the trial court entered an order that stated, in pertinent part:

“Attorneys for the parties appeared before the Court for a hearing on April 30, 2010. The parties have agreed that no evidentiary hearing is required to comply with the order remanding the case back to the Circuit Court. Therefore, the Court enters this ruling based on the testimony and evidence presented on July 6, 2009.
“The Court of Civil Appeals has tasked the Circuit Court with determining whether [the Association] ha[s] met the remaining standards as set forth in TFT, Inc. v. Warning Sys., Inc., necessary for the issuance of a permanent injunction.
“‘To be entitled to a permanent injunction, a plaintiff must demonstrate success on the merits, a substantial threat of irreparable injury if the injunction is not granted, that the threatened injury to the plaintiff outweighs the harm the injunction may cause the defendant, and that granting the injunction will not disserve the public interest.’
751 So.2d 1238, 1242 (Ala.1999), overruled on other grounds, Holiday Isle, LLC v. Adkins, 12 So.3d 1173 (Ala.2008). The Court of Civil Appeals ruled that [the Association] has indeed demonstrated success on the merits, and therefore has met the first prong of the TFT test.
“However, [the Association] ha[s] a more difficult time meeting the second prong of the TFT standard since [it] must show a substantial threat of irreparable injury if the injunction is not granted. The fact that the driveway is different from other driveways in the neighborhood is not sufficient to indicate an injury or a threat of an injury. Ms. Diana Tillery, the chair of the Architectural Review Committee, indicated that the Committee based [its] decision on the black-letter wording of the covenant. She did not mention any actual or threatened injury to the Homeowners’ Association or any individual property owner. Ms. Tillery also stated that the basis of the decision was aesthetics and the possibility of loose stone on the street. However, the president of the Homeowners’ Association, Mr. John Price, stated that loose stone in the common areas of the neighborhood was acceptable. There was no testimony of any reports of damage or injury in the neighborhood due to loose stone on the street. No witness for [the Association] testified about a decrease in property values in the neighborhood due to the driveway. Mr. Billy Cleveland, the developer of the subdivision, stated that the driveway would not affect property value. Moreover, [the Association] did not produce evidence that [the Rices’] immediate neighbors — those who would be most affected by the driveway’s aesthetic value — found the driveway objectionable. Therefore, aesthetic value is the only injury [the Association] ha[s] truly attempted to show, and the aesthetic value of the driveway is improved from the original condition of the driveway.
“[The Association] ha[s] cited Tubbs v. Brandon, 374 So.2d 1358 (Ala.1979), and Taylor v. Kohler, 507 So.2d 426 (Ala.1987), for the tenet, ‘The right to enjoin [a] breach will not depend on whether the covenantee will be damaged by the breach.’ While neither Tubbs nor Taylor have been overturned, later caselaw suggests that the Alabama courts have not continued to strictly follow that particular holding of Tubbs. More modern caselaw adopts the relative hardship test as outlined in Lange v. Scofield, 567 So.2d 1299, 1302 (Ala.1990): ‘[A] covenant will not be enforced if to do so would harm one landowner without substantially benefiting another landowner.’ The holding in Lange essentially matches the third, of the four prongs of the TFT test for the issuance of a permanent injunction.
“In this instance, despite the fact that [the Rices] did incur the expenses on their own, their only feasible option would have been to tear up the old driveway and install a new one. Mr. Rice testified that it would cost an estimated $15,000.00 to tear up the driveway and replace it. If [the Rices] were required to change the current driveway, the only option at this point would also be to tear up the existing driveway and replace it entirely, also at a cost of $15,000.00. There was no testimony concerning any other possible remedies at trial. Enforcing the covenant against [the Rices] as strictly as [the Association] desire[s] would harm [the Rices] substantially more than it would benefit [the Association]. See Lange. Moreover, the aesthetic harm to [the Association] is far less than the monetary harm [the Rices] would incur in replacing the entire driveway. Therefore, [the Association] ha[s] not met the second prong of the TFT standard.
“The fourth prong of the TFT standard involves disservice to the public interest. The public interest would likely not be disserved by granting this injunction. The only possible members of the public that would be affected by a ruling either way in this case would be potential buyers of property in the subdivision. Those potential buyers would likely not be swayed one way or the other in their decision to purchase by the nature of the defendants’ driveway. However, they would also likely not be swayed by a plain concrete driveway. Therefore, [the Association] ha[s] met the fourth prong of the TFT test.
“Judgment is entered for [the Rices]. [The Rices] have not proved damages under the Litigation Accountability Act. Each party is to bear its own costs and fees.”

(Footnote and references to the record omitted.)

On June 25, 2010, the Association filed a Rule 59(e), Ala. R. Civ. P., motion, arguing that the “relative-hardship test” is not to be applied in the enforcement of neighborhood restrictive covenants. The Rices filed an objection to the Association’s motion, and the Association filed a response to the Rices’ objection. On August 20, 2010, the trial court entered an order allowing the parties 30 days to submit additional caselaw regarding the application of the “relative-hardships doctrine,” noting that the Association’s postjudgment motion was being kept under advisement by agreement. The Association filed a supplement to its postjudgment motion on September 8, 2010. The Association’s postjudgment motion was denied by operation of law on September 28, 2010. The Association filed a notice of appeal to the Alabama Supreme Court on October 29, 2010; that court transferred the appeal to this court, pursuant to § 12-2-7(6), Ala. Code 1975.

On appeal, the Association argues that the trial court erred in balancing the equities to determine whether it should grant the injunctive relief requested by the Association. The Association quotes several opinions in which Alabama appellate courts have stated that “the mere breach of the covenant is a sufficient basis for interference by injunction.” Tubbs v. Brandon, 374 So.2d 1358, 1361 (Ala.1979) (citing Reetz v. Ellis, 279 Ala. 453, 186 So.2d 915 (1966)); see also Willow Lake Residential Ass’n v. Juliano, 80 So.3d 226 (Ala.Civ.App.2010). Based on that statement, the Association concludes that an injunction must issue in every case in which a breach of a restrictive covenant is proven, regardless of any equitable considerations. We disagree with that general statement of the law.

In Lange v. Scofield, 567 So.2d 1299 (Ala.1990), our supreme court expressly adopted the relative-hardship test, an equitable doctrine that generally provides that a restrictive covenant “will not be enforced if to do so would harm one landowner without substantially benefiting another landowner.” 567 So.2d at 1302 (citing 5 Richard R. Powell, The Law of Real Property § 679(3) (1987 rev. ed.)). Under the relative-hardship test as expressed in Lange, it is possible that the breach of a restrictive covenant would not automatically require the issuance of an injunction. As the supreme court explained in Lange:

“The factors to be considered in applying this test are well stated in 20 Am. Jur.2d Covenants, Conditions, & Restrictions § 313, at 876-77 (1965):
“ ‘Broadly speaking, the enforcement of building restrictions is governed by equitable principles, and will not be decreed if, under the facts of the particular case, it would be inequitable and unjust.... The complainant’s right to insist on the restrictive covenant must be clear and satisfactory....
“‘The equitable enforcement of a restriction can be invoked only for the purpose of protecting the benefit which it was the object of the covenant to afford. If the restrictive covenant has ceased to have any beneficial or substantial value to the ... property, it can form no ground for equitable relief.... [I]f the defendant will be subject to great hardship or the consequences would be inequitable, relief will be denied.’ ”

567 So.2d at 1302. Based on Lange, if, upon a balancing of the equities, a court determines that the harm resulting to one landowner from the enforcement of a restrictive covenant would be considerably disproportionate to the benefit received by the landowner seeking enforcement, a court may decline to afford the landowner seeking enforcement the equitable relief of an injunction to redress a breach of the restrictive covenant. 9 Richard R. Powell, Powell on Real Property § 60.10[3] (Sept. 2011).

Nevertheless, based on the specific facts in this case, we agree with the Association that the trial court erred in applying the relative-hardship test. In Lange, supra, a landowner purchased a residential lot subject to a restrictive covenant precluding the construction of any buildings without the unanimous consent of nearby neighbors. When one neighbor objected to the landowner’s plan to build a house on the lot, the landowner sought declaratory and injunctive relief against the prospective enforcement of the restrictive covenant. 567 So.2d at 1300. In Lange, the supreme court did not consider whether the relative-hardship test applies when a landowner breaches a restrictive covenant and a neighboring landowner seeks remedial enforcement of the restrictive covenant. This court expressly addressed that situation in Maxwell v. Boyd, 66 So.3d 257 (Ala.Civ.App.2010). In Maxwell, this court held that a landowner who actively breaches a restrictive covenant with actual knowledge or constructive notice of the content of the covenant cannot invoke the relative-hardship test. As this court explained in Maxwell, the relative-hardship test rests entirely on equitable principles. 66 So.3d at 261-62. This court further stated:

“[I]t follows that seeking the invocation of the doctrine will require the possession of clean hands....
“A pertinent specific application of the clean-hands doctrine is that a restrictive covenant should be enforced if the defendant had knowledge [or constructive notice] of it before constructing an improvement contrary to its provisions, even if the harm is disproportionate.”

66 So.3d at 261.

In this case, William Rice testified that he had been made aware of the covenants upon receipt of the April 23, 2008, letter from the Association welcoming the Rices to the neighborhood. The record further indicates that the Rices did not begin the modifications to the driveway until after they had received the restrictive covenants. Hence, the only conclusion to be drawn is that the Rices altered their driveway with constructive notice that the combination of the materials they were applying did not comply with § 6.20 of the restrictive covenants.

The dissent attempts to distinguish this case from Maxwell by asserting (1) that the driveway in the present case was not as clear a violation of the restrictive covenant at issue as was the violation at issue in Maxwell, particularly in light of the trial court’s findings that the restrictive covenant contained a latent ambiguity and that the driveway conformed to the covenant, and (2) that, unlike in Maxwell, the Rices had not been warned during the time the modifications were being made to the driveway that the driveway would not comply with the covenant. 90 So.3d at 742 (Bryan, J., dissenting). We note first, as does the dissent, that the trial court’s finding — that the restrictive covenant contained a latent ambiguity — was reversed by this court in Grove Hill. Thus, we decline to rely on that finding to now conclude that the modification of the driveway was not a clear violation of the restrictive covenant.

Moreover, there is no evidence in the record, testimonial or otherwise, suggesting that the Rices were in doubt as to whether their driveway would conform to the restrictive covenant at issue. This is not a case in which a homeowner proceeded to construct a substantial improvement on his or her property based on an innocent, mistaken interpretation of a restrictive covenant or based on some confusion as to the application of the covenant; rather, William testified unequivocally as follows:

“[Counsel for the Association]: Okay. Did you consider any of the rules in the covenants before you made the decision to improve your driveway?
“[William]: No, sir.”

Additionally, William testified that he had not seen any other gravel driveways in the neighborhood. The Rices admitted that, despite knowing that their driveway would be modified with materials different from every other driveway in the subdivision, they did not seek preapproval of their modification plan from the Architectural Review Committee (“the ARC”), in clear violation of § 5.05 of the restrictive covenants. The Rices simply failed to take the restrictive covenants into consideration before modifying the driveway.

With regard to the dissent’s assertion that the Rices had not been warned that their modification of the driveway was in violation of the restrictive covenants, 90 So.3d at 742 (Bryan, J., dissenting), we note that the law does not place the onus on the enforcer of restrictive covenants to warn violators thereof that they may not be in compliance, particularly in circumstances such as those in the present case, where the restrictive covenants require homeowners to gain preapproval of any improvements. Had the Rices obtained such preapproval, any resulting damages could have been avoided. We note also that there is no evidence in the record suggesting that the members of the Association were aware of the Rices’ violation of the restrictive covenants during the modification of the driveway and failed to warn the Rices of that violation.

The dissent also asserts that the Rices’ conduct does not rise to the level of “morally reprehensible, willful misconduct.” 90 So.3d at 742 (Bryan, J., dissenting). We agree that the evidence indicates that the Rices intended in good faith to improve the aesthetics of their property by modifying the driveway and that they did not violate the restrictive covenants out of spite, ill will, or any other improper motive. However, this court held in Maxwell, supra, that the clean-hands doctrine applies when a landowner violates a restrictive covenant of which he or she has constructive notice. 66 So.3d at 262. That holding coincides with the maxim that “[w]here one takes land with notice of restrictions, equity and good conscience will not permit that person to act in violation thereof .... ” Gladstone v. Gregory, 95 Nev. 474, 480, 596 P.2d 491, 495 (1979) (holding that homeowners- with only constructive notice of a one-story building limitation before beginning construction adding second story onto home were not entitled to balancing of the equities under relative-hardship test). The fact remains that the Rices, with constructive notice of the restrictive covenants, did not consult the covenants or otherwise seek permission from the Association before constructing a driveway different from all the other driveways in the neighborhood. By proceeding despite their notice of the restrictive covenants, the Rices are without clean hands.

Because the Rices had constructive notice of the restrictive covenants before they actively breached § 6.20, they cannot invoke the relative-hardship test to avoid the consequences of their breach. When the relative-hardship test does not apply, and the offending landowner has not presented any other valid defense to enforcement of the restrictive covenant, a violation of the restrictive covenant provides a sufficient basis for the granting of injunctive relief. 9 R. Powell, supra, § 60.10[3]. The law presumes irreparable harm from the breach of a restrictive covenant regardless of whether the breach actually enhances the value of the subject property. Willow Lake Residential Ass’n v. Juliano, 80 So.3d at 239; see also 9 R. Powell, supra, § 60.10[3] (“The fact that the burdened property will increase in value if the restriction is not enforced is not sufficient.”). The law cannot adequately address that harm, so an injunction must issue to remedy the breach even if that injunction causes the offending landowner great expense. See Maxwell, 66 So.3d at 262.

As thoroughly explained by this court in Willow Lake Residential Ass’n v. Juliano, a case in which the relative-hardship test was not at issue:

“As to the former finding — that the construction of the steps actually enhanced the value of the subdivision— the record contains no competent evidence as to the effect of the construction of the steps on the value of the subdivision property. The Association maintained throughout the proceedings that any violation of a restrictive covenant, if allowed over its objection, necessarily dilutes the power of the restrictive covenants and thereby lessens the value of the subdivision property. We agree. In creating the restrictive covenants, the partnership expressly declared that the purpose of the covenants was ‘to protect the value and desirability of the Property.’ Any unauthorized violation of the restrictive covenants would run counter to that purpose and would be classified as ‘irreparable harm’ as a matter of law. See Tubbs v. Brandon, 374 So.2d 1358, 1361 (Ala.1979). Thus, the steps, if allowed to stand in violation of the restrictive covenants, decrease the value of the subdivision property.
“Moreover, we conclude that it is immaterial whether the construction of the steps actually increased the value of the subdivision property. ‘When a restrictive covenant is broken, [our supreme court] has stated that an injunction should be issued because the mere breach of the covenant is a sufficient basis for interference by injunction. The right to enjoin such a breach will not depend upon whether the covenan-tee will be damaged by the breach.’ Tubbs v. Brandon, 374 So.2d at 1361 (citing Reetz v. Ellis, 279 Ala. 453, 186 So.2d 915 (1966)). As explained by our supreme court,
“ ‘the reasons for this rule are stated to be that the owner of land, when selling to another, may insist on such covenants as he pleases touching its use and has the right to define the injury for himself; and that, when the covenant is broken, an injunction should issue because, from the very nature of the case, the remedy at law is inadequate.’
“Reetz, 279 Ala. at 460, 186 So.2d at 921. The trial court’s reasoning would imper-missibly allow individual homeowners to violate restrictive covenants if those homeowners were subjectively convinced that the violation would improve the value of the subdivision property. That reasoning directly contradicts the law that ‘a party to a covenant is entitled to seek its enforcement even if the ... breach does not negatively impact the value of his property.’ Viking Props., Inc. v. Holm, 155 Wash.2d 112, 121 n. 4, 118 P.3d 322, 327 n. 4 (2005). Therefore, the trial court erred in determining that the steps enhanced the value of the subdivision property and in denying the Association relief on that basis.”

80 So.3d at 239.

In the present case, the Association, having proven that the Rices breached an unambiguous restrictive covenant of which they had notice, was entitled to the enforcement of that restrictive covenant. Because the trial court declined to grant the permanent injunction requested by the Association based on its application of the relative-hardship test, we conclude that the trial court erred. We therefore reverse the trial court’s judgment and remand the cause for the entry of a judgment consistent with this opinion and for such further proceedings as are necessary to conclude this matter.

APPLICATION GRANTED; OPINION OF JULY 29, 2011, WITHDRAWN; OPINION SUBSTITUTED; REVERSED AND REMANDED.

PITTMAN and THOMAS, JJ., concur.

BRYAN, J., dissents, with writing, which THOMPSON, P.J., joins.

BRYAN, Judge,

dissenting.

I respectfully dissent. Grove Hill Homeowners’ Association, Inc. (“the Association”), sought a permanent injunction enjoining William Rice and Laura Rice from maintaining a driveway in violation of restrictive covenants. In our opinion in the first appeal in this case, this court recited the standard for issuing a permanent injunction:

“ ‘To be entitled to a permanent injunction, a plaintiff must demonstrate success on the merits, a substantial threat of irreparable injury if the injunction is not granted, that the threatened injury to the plaintiff outweighs the harm the injunction may cause the defendant, and that granting the injunction will not disserve the public interest.’
“TFT, Inc. v. Warning Sys., Inc., 751 So.2d 1238, 1242 (Ala.1999), overruled on other grounds, Holiday Isle, LLC v. Adkins, 12 So.3d 1173 (Ala.2008).”

Grove Hill Homeowners’ Ass’n v. Rice, 43 So.3d 609, 613 (Ala.Civ.App.2010) (“Grove Hill ”). In Grove Hill, this court concluded that the Association had established the first element of the permanent-injunction standard, ie., success on the merits. 43 So.3d at 615. We reversed the trial court’s judgment and remanded the case for the trial court to consider whether the Association had established the remaining three elements of the permanent-injunction standard.

In its judgment on remand, the trial court observed that the third element of the permanent-injunction standard outlined above “essentially matches” the relative-hardship test discussed in Lange v. Scofield, 567 So.2d 1299 (Ala.1990). The trial court then determined that enforcing the restrictive covenants against the Rices would harm them substantially more than it would benefit the Association and, consequently, denied the injunction. In reversing the trial court’s judgment, the main opinion concludes that the Rices cannot invoke the relative-hardship test because the Rices had constructive notice of the restrictive covenants before a violation of the covenants occurred. However, the relative-hardship test is very similar to the third element of the permanent-injunction standard that this court in Grove Hill instructed the trial court to apply. Thus, I do not think that the trial court erred in balancing the harms or hardships in determining whether to enforce the restrictive covenants.

Essentially, the main opinion concludes that the clean-hands doctrine precludes the application of the relative-hardship test when a party seeking relief from a restrictive covenant had knowledge of the covenant before violating it. I would not apply the clean-hands doctrine to establish a bright-line rule precluding the application of the relative-hardship test in cases such as this one. The clean-hands doctrine “ ‘finds expression in specific acts of willful misconduct’ ” that are “ ‘morally reprehensible as to known facts.’ ” Retail Developers of Alabama, LLC v. East Gadsden Golf Club, Inc., 985 So.2d 924, 932 (Ala.2007) (quoting Sterling Oil of Oklahoma, Inc. v. Pack, 291 Ala. 727, 746, 287 So.2d 847, 864 (1973)). The Rices’ conduct does not rise to the level of morally reprehensible, willful misconduct. I would hold that a trial court should consider a party’s knowledge of a restrictive covenant as a factor in applying the relative-hardship test rather than holding that such knowledge precludes the application of the test. See Harksen v. Peska, 581 N.W.2d 170, 176 (S.D.1998) (stating that whether a party “knew that he was violating the covenant” was one factor to consider in applying the relative-hardship test and concluding that it would be inequitable to require a property owner who built a cabin in violation of restrictive covenants to remove the cabin although he knew he was violating the covenants).

In concluding that the relative-hardship test does not apply, the main opinion relies in part on Maxwell v. Boyd, 66 So.3d 257 (Ala.Civ.App.2010). However, the facts in Maxwell are distinguishable from the facts in this case. In Maxwell, the Boyds, homeowners seeking to avoid the enforcement of a restrictive covenant, built a garage that clearly violated the restrictive covenant. The Boyds did not contend that the garage complied with the restrictive covenant or that the restrictive covenant was “of doubtful meaning or ambiguous.” 66 So.3d at 261. While building the garage, the Boyds were warned numerous times that the structure would not comply with the restrictive covenant, but they built the garage regardless.

Conversely, in this case, the parties hotly disputed whether the Rices’ driveway actually violated the restrictive covenants and whether the covenants contained a latent ambiguity. The question whether the Rices’ driveway conformed to the restrictive covenants is not as clear-cut as the question regarding conformity in Maxwell. As we noted in Grove Hill, the trial court determined that the restrictive covenants contained a latent ambiguity and that the Rices’ driveway conformed to the covenants. 43 So.3d at 613, 615. Although this court reversed the trial court’s judgment in Grove Hill, the fact that the trial court initially ruled that the Rices had not violated the restrictive covenants suggests that the Rices did not act reprehensibly in constructing their driveway. Further, unlike the situation in Maxwell, the Rices were not repeatedly warned against constructing their driveway.

In concluding that the relative-hardship test should be applied in favor of the Rices, the trial court implicitly rejected the Association’s unclean-hands argument. “ ‘[Wjhere a trial court does not make specific findings of fact concerning an issue, [an appellate court] will assume that the trial court made those findings necessary to support its judgment, unless such findings are clearly erroneous.’” Woodland Grove Baptist Church v. Woodland Grove Cmty. Cemetery Ass’n, 947 So.2d 1031, 1039 (Ala.2006) (quoting Sundance Marina, Inc. v. Reach, 567 So.2d 1322, 1324 (Ala.1990)). “The application of the clean hands doctrine is a matter within the sound discretion of the trial court.” J & M Bail Bonding Co. v. Hayes, 748 So.2d 198, 199 (Ala.1999). Given the facts of this case, the trial court did not err in rejecting the Association’s argument that the Rices’ have unclean hands. The Rices’ actions do not rise to the level of invoking the clean-hands doctrine, and the trial court correctly determined that enforcing the restrictive covenants against the Rices would harm them substantially more than it would benefit the Association. Thus, I would affirm the trial court’s judgment applying the relative-hardship test in favor of the Rices.

THOMPSON, P.J., concurs.

      . As William testified, the landscaping company sprayed hot liquid asphalt over the concrete base of the driveway and then shoveled loose granite over the asphalt layer. That granite was described in the record as "pea gravel.” Apparently, it was intended that the pea gravel would fasten to the asphalt layer as it dried. However, it is undisputed that some of the pea gravel was loose from the asphalt layer by the time of trial.

      . John Price, who was on the board of directors of the Association when the driveway was modified, testified that he had observed the driveway for several months when passing by the Rices’ property. Price testified that he was under the assumption that the driveway was not yet completed. That testimony does not establish that Price knew that the Rices intended to leave the driveway in a permanent condition that would violate § 6.20.

      . For that reason, we find no need to address the dissent’s argument that the equities of the case favor the Rices. 90 So.3d at 741. We do note, however, that, in Lange v. Scofield, our supreme court emphasized that the evidence showed that the proposed house that would violate the restrictive covenant would not appreciably increase the density of the neighborhood and would be "consistent in size, design, and overall quality” with the other houses in the neighborhood. 567 So.2d at 1301. Our research has revealed no Alabama case in which an appellate court has applied the relative-hardship test to allow a homeowner to violate an unambiguous restrictive covenant in order to maintain an improvement that is inconsistent with the design of all other similar improvements in the same subdivision, even if that inconsistent design may be considered equally aesthetically pleasing.
      In Lange, the supreme court also emphasized that the lot at issue in that case would be "almost without value" if the restrictive covenant was enforced. 567 So.2d at 1302. That is not the case here, where enforcement of § 6.20 would not prevent the Rices from using their property as a residence in the same manner as their neighbors.
      Finally, in Lange, the adjoining lot owner who sought enforcement of the restrictive covenant could not prove that she would receive any benefit from the enforcement. 567 So.2d at 1302. In this case, the restrictive covenants are intended to, among other things, "establish and preserve a harmonious design for the development .... ” Grove Hill Subdivision Declaration of Covenants, Conditions, and Restrictions, § 5.05. In Turner v. Sellers, 878 So.2d 300 (Ala.Civ.App.2003), this court noted that subdivision restrictive covenants that are consistently applied and followed substantially benefit all the landowners within the subdivision by defining and controlling the acceptable development of the property therein. 878 So.2d at 306. Just as in Turner, the Association in this case would lose that benefit if the Rices’ driveway was allowed to stand. 878 So.2d at 306 ("To date, the trial court found, the Committee has not allowed any other variances from the restrictive covenants. Should an exception be permitted in this case, there would be no reason why neighbors who have similar drop-offs in the back of their properties should not be given similar relief from the restrictive covenant, thereby defeating the purpose of having the restrictive covenants.”).

      . On application for rehearing, the Rices complain that this court's opinion effectively negates the relative-hardship test, leaving it no field of operation. We disagree. As was held in Lange v. Scofield, a landowner who purchases property with actual knowledge of a restrictive covenant may nevertheless invoke equity to avoid that covenant if the covenant no longer serves any substantial beneficial purpose and its prospective enforcement would cause undue harm to the covenantee. 567 So.2d at 1302. See also Johnson v. H.J. Realty, 698 So.2d 781, 783 (Ala.Civ.App.1997) (voiding restrictive covenant requiring land to be used for automobile dealership where trial court found that restriction would not benefit adjoining landowners and would render property basically unmarketable).


source: Caselaw Access Project

author: PARKER, Justice.

license: Public Domain

text:
    Ex parte William RICE and Laura Rice. (In re Grove Hill Homeowners’ Association, Inc. v. William Rice and Laura Rice).
    1110230.
    Supreme Court of Alabama.
    Feb. 24, 2012.
    Kenneth J. Mendelsohn of Jemison & Mendelsohn, P.C., Montgomery, for petitioners.
    Submitted on petitioners’ brief only.
   PARKER, Justice.

The petition for the writ of certiorari is denied.

In denying the petition for the writ of certiorari, this Court does not wish to be understood as approving all the language, reasons, or statements of law in the Court of Civil Appeals’ opinion. Horsley v. Horsley, 291 Ala. 782, 280 So.2d 155 (1973).

WRIT DENIED.

MALONE, C.J., and WOODALL, STUART, BOLIN, MURDOCK, SHAW, MAIN, and WISE, JJ., concur.


author: BRYAN, Judge.

text:
    B & B WRECKER SERVICE, INC. v. CITY OF CITRONELLE.
    2100820.
    Court of Civil Appeals of Alabama.
    Dec. 2, 2011.
    Certiorari Denied March 9, 2012 Alabama Supreme Court 1110307.

      Richard E. Mather, Mobile, for appellant.
    Mark J. Everest of Galloway, Wetter-mark, Everest, Rutens & Gaillard, LLP, Mobile, for appellee/
   BRYAN, Judge.

B & B Wrecker Service, Inc. (“B & B”), appeals from a summary judgment in favor of the City of Citronelle (“the city”). We reverse and remand.

Undisputed Facts

The following facts are undisputed. On December 19, 2008, officers of the city’s police department (“the police department”) obtained a search warrant authorizing them to search a mobile home (“the mobile home”) located in Citronelle for evidence relating to the manufacture of methamphetamine. Pursuant to the search warrant, the officers seized, among other things, a 2000 Dodge Ram 3500 pickup truck (“the Dodge Ram”). The police department then called B & B and asked B & B to come to the mobile home. Officer Bill Newburn of the police department then directed B & B to tow the Dodge Ram and three other automobiles to B & B’s storage facility. Four or five days after towing the Dodge Ram and the three other automobiles to its storage facility, B & B asked Officer Newburn whether the city wanted to move the Dodge Ram and the three other automobiles to a facility owned by the city for storage because the fees for storing the Dodge Ram and the three other automobiles at B & B’s facility would total $100 per day. Officer New-burn told B & B that he would check with the mayor and the police chief. Officer Newburn later told B & B that the city wanted to leave the Dodge Ram and the three other automobiles'at B & B’s facility.

On February 27, 2009, the State of Alabama instituted an action in the Mobile Circuit Court, seeking the forfeiture of the Dodge Ram and other items seized at the premises where the mobile home was located. The owner of the Dodge Ram (“the owner”) contested the forfeiture of the Dodge Ram. At the conclusion of the bench trial of that action on December 1, 2009, the Mobile Circuit Court orally announced that it was going to rule in favor of the owner. On February 3, 2010, the Mobile Circuit Court entered a written judgment in favor of the owner. The judgment ordered the State to return the Dodge Ram to the owner.

On January 22, 2010, the owner sued B <& B in the Mobile District Court. The owner alleged that the police department had released its hold on the Dodge Ram pursuant to the judgment of the Mobile Circuit Court in the forfeiture action but that B & B had refused to release the Dodge Ram to the owner. The owner sought a judgment awarding him possession of the Dodge Ram. B & B counterclaimed, seeking to recover its fees for storing the Dodge Ram at its facility. Following a bench trial, the Mobile District Court, on August 4, 2010, entered a judgment (1) finding that, if B & B was owed fees for storing the Dodge Ram at its facility, the fees were not owed by the owner and (2) finding in favor of the owner with respect to his claim seeking possession of the Dodge Ram.

B & B appealed from the judgment of the Mobile District Court to the Mobile Circuit Court. On December 22, 2010, the Mobile Circuit Court entered a judgment (1) finding that the owner was not responsible for B & B’s fees for storing the Dodge Ram at its facility and (2) finding in favor of the owner with respect to his claim seeking possession of the Dodge Ram.

Procedural History

On November 8, 2010, B & B sued the city in the Mobile Circuit Court. In pertinent part, B & B’s complaint alleged:

“3. That [the police department] impounded [the Dodge Ram] pursuant to a lawful drug arrest and placed it for storage and safe keeping with [B & B] pending the outcome of the criminal proceedings and civil forfeiture proceedings initiated by [the State] through the Mobile County District Attorney’s Office.
“4. That on or about December 1, 2009, the [Mobile Circuit Court] ordered the [Dodge Ram] to be released to the rightful owner.
“5. [The city] has refused to pay the storage fees even though lawful demand was made for the same.
“6. [B & B] has incurred substantial storage fees as a result of the impoundment.”

Answering, the city denied that it was obligated to pay B & B’s fees for storing the Dodge Ram at its facility.

On March 11, 2011, the city moved for a summary judgment. The city asserted that, although it had asked B & B to tow and store the Dodge Ram, it was not liable for B & B’s storage fees because, it said, (1) § 11-47-5, Ala.Code 1975, requires contracts with municipalities to be in writing and B & B did not have a written contract with the city relating to the towing or storage of the Dodge Ram and (2) § 20-2-93(e)(2), Ala.Code 1975, does not authorize the payment of storage fees on seized property when the seized property is not forfeited.

In opposition to the summary-judgment motion, B & B asserted (1) that § 20-2-93(e)(2) was not applicable to B & B’s claim because the Dodge Ram had not been forfeited and (2) that B & B was entitled to recover its fees for storing the Dodge Ram by virtue of the doctrines of implied contract and quantum meruit. Following a hearing, the trial court, on April 18, 2011, entered a judgment granting the summary-judgment motion on the ground that the city was not obligated to pay B & B’s storage fees under § 20-2-93 because the Dodge Ram had not been forfeited. Thereafter, B & B timely appealed to this court.

Standard of Review

“We review a summary judgment de novo. American Liberty Ins. Co. v. AmSouth Bank, 825 So.2d 786 (Ala.2002).
“ ‘We apply the same standard of review the trial court used in determining whether the evidence presented to the trial court created a genuine issue of material fact. Once a party moving for a summary judgment establishes that no genuine issue of material fact exists, the burden shifts to the non-movant to present substantial evidence creating a genuine issue of material fact. “Substantial evidence” is “evidence 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.” In reviewing a summary judgment, we view the evidence in the light most favorable to the nonmovant and entertain such reasonable inferences as the jury would have been free to draw.’
“Nationwide Prop. & Cas. Ins. Co.[ v. DPF Architects, P.C.], 792 So.2d [369] at 372 [ (Ala.2000) ] (citations omitted), quoted in American Liberty Ins. Co., 825 So.2d at 790.”

Potter v. First Real Estate Co., 844 So.2d 540, 545 (Ala.2002).

Analysis

B & B first argues that the trial court erred in granting the summary-judgment motion because, it says, the final sentence of § 11^7-5 implies that a city may orally contract for “purchases for the ordinary needs of the municipality” and B & B presented substantial evidence indicating that the city had orally contracted for B & B to store the Dodge Ram at B & B’s facility. However, the record before us does not indicate that B & B presented that argument to the trial court; therefore, we cannot consider it. See Ex parte Ryals, 773 So.2d 1011, 1013 (Ala.2000) (“[T]he appellate court can consider an argument against the validity of a summary judgment only to the extent that the record on appeal contains material from the trial court record presenting that argument to the trial court before or at the time of submission of the motion for summary judgment. Andrews v. Merritt Oil Co., 612 So.2d 409 (Ala.1992).” (emphasis omitted)).

B & B also argues (1) that § 20-2-93(e)(2) does not apply in the case now before us because the Dodge Ram was not forfeited and (2) that B & B is entitled to recover its storage fees from the city pursuant to the doctrines of implied contract and quantum meruit. In response, the city argues that B & B did not specifically plead a claim of implied contract or quantum meruit. However, Rule 8(a)(1), Ala. R. Civ. P., states that “[a] pleading which sets forth a claim for relief ... shall contain (1) a short and plain statement of the claim showing that the pleader is entitled to relief.” B & B’s complaint alleged that “[the police department had] impounded [the Dodge Ram] pursuant to a lawful drug arrest and placed it for storage and safe keeping with [B & B] pending the outcome of the criminal proceedings and civil forfeiture proceedings,” that “[the Mobile Circuit Court had] ordered the [Dodge Ram] to be released to the rightful owner,” that “[B & B] ha[d] incurred substantial storage fees as a result of the impoundment,” and that “[the city] ha[d] refused to pay the storage fees even though lawful demand was made for the same.” Under Rule 8(a)(1), those allegations were sufficient to state a claim of implied contract or quantum meruit. Accordingly, we will consider the merits of B & B’s argument (1) that § 20-2-93(e)(2) does not apply in the case now before us because the Dodge Ram was not forfeited and (2) that B & B is entitled to recover its storage fees from the city pursuant to the doctrines of implied contract and quantum meruit.

“The fundamental rule of statutory construction is to ascertain and give effect to the intent of the legislature in enacting the statute. Words used in a statute must be given their natural, plain, ordinary, and commonly understood meaning, and where plain language is used a court is bound to interpret that language to mean exactly what it says. If the language of the statute is unambiguous, then there is no room for judicial construction and the clearly expressed intent of the legislature must be given effect.”

IMED Corp. v. Systems Eng’g Assocs. Corp., 602 So.2d 344, 346 (Ala.1992). Section 20-2-93(e)(2) is not ambiguous. It clearly states that “[w]hen property is forfeited ... the ... municipal law enforcement agency may ... [s]ell [property] which is not required to be destroyed by law and which is not harmful to the public” and that “[t]he proceeds from the sale ... shall be used, first, for payment of all proper expenses of the proceedings for forfeiture and sale, including expenses of seizure, maintenance of or custody, advertising and court costs.... ” It does not purport to provide what should occur if seized property is not forfeited. Accordingly, we conclude that the plain language of § 20-2-93(e)(2) indicates that it does not govern the case now before us because the Dodge Ram was not forfeited.

In Bethune v. City of Mountain Brook, 293 Ala. 89, 93, 300 So.2d 350, 352 (1974), the supreme court stated that, despite the requirement of Title 37, § 467, Ala.Code 1940 (Recomp.1958), a statutory predecessor of § 11^17-5, that a contract with a municipality relating to matter other than purchases for the ordinary needs of the municipality be in writing,

“provided a contract is within the scope of its corporate powers, a municipal corporation may be held liable on an implied contract, either where the contract is implied in fact from corporate acts, or is implied in law, to prevent the municipality from enriching itself by accepting and retaining benefits without paying just compensation therefor.”

In Green v. Hospital Building Authority of Bessemer, 294 Ala. 467, 470, 318 So.2d 701, 704 (1975), the supreme court explained:

“There are two kinds of implied contracts — those implied in fact and those implied in law. Contracts implied in law are more properly described as quasi or constructive contracts where the law fictitiously supplies the promise to prevent a manifest injustice or unjust enrichment.”

In the case of quasi or constructive contracts,

“ ‘ “ ‘[t]he rule is that if one knowingly accepts services rendered by another, and the benefit and result thereof, the law implies a promise on the part of the one who so accepts with knowledge, to pay the reasonable value of such services rendered.’ Richards v. Williams, 231 Ala. 450, 453, 165 So. 820, 823 (1936). In order to succeed on a claim of unjust enrichment, the plaintiff must show that he had a reasonable expectation of compensation for his services. Utah Foam Prods., Inc. v. Polytec, Inc., 584 So.2d 1345, 1350 (Ala.1991).” ’
“Associates Commercial Corp. v. Roberts, 844 So.2d 1256, 1261 (Ala.Civ.App.2002) (quoting Phillips v. Fuller, 814 So.2d 885, 888 (Ala.Civ.App.2001)).”

CIT Group/Equip. Fin., Inc. v. Roberts, 885 So.2d 185, 189-90 (Ala.Civ.App.2003).

In the case now before us, the trial court had before it substantial evidence indicating that the police department called B & B to the mobile home; that the police department directed B & B to tow the Dodge Ram and three other automobiles to B & B’s storage facility and to store the Dodge Ram and the three other automobiles there; that, four or five days later, B & B asked Officer Newburn whether the city wanted to move the Dodge Ram to a facility owned by the city for storage because the fees for storing the Dodge Ram and the three other automobiles would total $100 per day; and that Officer Newburn later told B & B that the city wanted to leave the Dodge Ram and the three other automobiles at B & B’s facility. Although the city did not expressly promise to pay B & B for storing the Dodge Ram at its facility, the city knowingly accepted the benefit of B & B’s storing the Dodge Ram at B & B’s facility and knew that B & B was charging a fee for that service. Moreover, the evidence establishing that B & B told Officer New-burn that the storage fees for the Dodge Ram and the three other automobiles would total $100 per day and that Officer Newburn later told B & B that the city wanted to leave the Dodge Ram and the three other automobiles at B & B’s facility constitutes substantial evidence indicating that B & B had a reasonable expectation that it would be paid for storing the Dodge Ram at its facility. Accordingly, we conclude that the evidence before the trial court established a prima facie case of a quasi or constructive contract pursuant to which the law would imply a promise by the city to pay B & B. for storing the Dodge Ram. Accordingly, we reverse the summary judgment in favor of the city and remand the cause to the trial court for further proceedings consistent with this opinion.

REVERSED AND REMANDED.

THOMPSON, P.J., and PITTMAN, THOMAS, and MOORE, JJ., concur.

      . Section 11-47-5 provides:
      "Contracts entered into by a municipality shall be in writing, signed and executed in the name of the city or town by the officers authorized to make the same and by the party contracting. In cases not otherwise directed by law or ordinance, such contracts shall be entered into and executed by the mayor in the name of the city or town and all obligations for the payment of money by the municipality, except for bonds and interest coupons, shall be attested by the clerk. This section shall not be construed to cover purchases for the ordinary needs of the municipality.”

      . In pertinent part, § 20-2-93(e)(2) provides:
      "(e) When property is forfeited under this chapter the state, county, or municipal law enforcement agency may:
      "(2) Sell that which is not required to be destroyed by law and which is not harmful to the public. The proceeds from the sale authorized by this subsection shall be used, first, for payment of all proper expenses of the proceedings for forfeiture and sale, including expenses of seizure, maintenance of or custody, advertising and court costs....”


author: PITTMAN, Judge. BRYAN, Judge,

text:
    The FINISH LINE d/b/a Clay, Metal and Stone v. J.F. PATE & ASSOCIATES CONTRACTORS, INC., and Western Surety Company.
    2100006.
    Court of Civil Appeals of Alabama.
    Feb. 17, 2012.

      John R. Frawley, Jr., Irondale, for appellant.
    David F. Daniell of Daniell, Upton, Perry & Morris, P.C., Daphne, for appellees.
   PITTMAN, Judge.

The Finish Line, doing business as Clay, Metal and Stone (“Finish Line”), appeals from summary judgments in favor of J.F. Pate & Associates Contractors, Inc. (“Pate”), and Western Surety Company (“Western”) on its “little Miller Act” claims against them. See Ala.Code 1975, § 39-1-1 et seq. We affirm.

Facts and Procedural History

The Baldwin County Board of Education (“the Board”) employed Pate as the general contractor for the construction of Foley Middle School. Pate entered into a subcontract with Delta Flooring, Inc. (“Delta”), to provide labor, materials, and equipment for the installation of tile, resilient flooring, and carpet in the school. Amendment (A) to the subcontract contained the following provision:

“Note: This is a tax exempt project. All material purchases will be made by special purchase order forms obtained by [Pate’s] office. Invoices for these materials should be made out to Baldwin County Board of Education c/o (your company’s name) — and the original copies should be submitted with your application for payment.”

On May 9, 2007, Pate, in its capacity as purchasing agent for the Board, signed a purchase order for 5,000 square feet of Seneca tile at a cost of $39,075. The purchase-order form designated Finish Line as the vendor, Delta as the party to whom the tile should be shipped, and the “Board c/o Delta” as the entity to whom the invoice for payment should be sent. Finish Line filled the order and shipped the tile to Delta in June 2007. It is undisputed that Finish Line received payment in the amount of $39,075 for the tile from Pate. Delta stored the tile in its warehouse until April 2008, when Pate instructed Delta to install the tile in the canteen area of the school gymnasium. On May 8, 2008, before Delta finished the installation, Jim Walker of Goodwyn, Mills and Cawood, the project architect, and John Pate, the chief operating officer of Pate, met with representatives of Finish Line and Delta to inspect the tile that had been installed. The architect found the tile “unacceptable due to the irregularities and inconsistencies in ... shape, surface and appearance.” Finish Line requested and was given an opportunity to cure the problem. On May 22, 2008, the architect, having concluded that Finish Line’s proposed solution would not cure the problem, sent Pate a memorandum formally rejecting the tiles, directing their removal, and ordering the installation of an alternate tile product. It is undisputed that Pate ordered and paid for the alternate tiles. Meanwhile, on April 30, 2008, Pate, in its capacity as purchasing agent for the Board, had signed another purchase order for additional flooring materials to be installed in other areas of the school. The party designations on that purchase order were the same as those on the first purchase order; Finish Line was named as the vendor, Delta as the party to whom the materials should be shipped, and the “Board c/o Delta” as the entity to whom the invoice for payment should be sent. Delta installed the flooring materials in the school, and Finish Line sent Delta an invoice in the amount of $34,123.12. Pate refused payment on that invoice, asserting that it was entitled to a setoff for the $39,075 payment it had made earlier for the Seneca tiles that had been rejected by the architect.

On February 19, 2009, Finish Line sued Pate, Pate’s surety (Western), Delta, and two individuals who had signed personal guaranties for the credit Finish Line had extended to Delta. The complaint asserted one claim: that “the defendants” had failed and refused to pay for flooring materials that Finish Line had supplied to the Foley Middle School construction project. Pate answered and asserted, among other defenses, that Finish Line lacked standing to sue Pate because Finish Line was not in privity of contract with Pate; that Finish Line had supplied a defective product that had been rejected by the architect and that had not been incorporated into the school; and that Pate was entitled to set off the amount it had paid for the defective tiles against the amount Finish Line demanded in the complaint. Western asserted the same defenses and contended that it was not liable to Finish Line because, it said, Pate was not liable to Finish Line. Pate also cross-claimed against Delta, alleging breach of contract, breach of warranty, and contractual and common-law indemnity. Specifically, Pate alleged that Delta had provided defective and/or nonconforming materials for the construction project — materials that had been rejected by the project architect.

Delta answered the complaint and moved for a partial summary judgment on the claim asserted by Finish Line, contending that it was not liable to pay Finish Line because, it said, it was not the purchaser of the flooring materials and it was not in privity of contract with Finish Line. Delta asserted that Pate, as the Board’s agent, not Delta, had ordered and was responsible to pay for the materials supplied by Finish Line. Delta also denied that its installation of the Seneca tiles was the reason for the architect’s rejection of the tiles and the Board’s refusal to pay Finish Line’s second invoice. Delta also answered Pate’s cross-claim, generally denying all the allegations therein.

In opposition to Delta’s motion for a partial summary judgment, Finish Line asserted that the problem with the Seneca tiles had been the result of Delta’s faulty installation. In support of that assertion, Finish Line submitted the affidavit of Jim Smith, its credit manager, who stated:

“[T]he tiles supplied to both the Foley Middle School and Fairhope Middle School were manufactured by Seneca Tiles at the same time, in the same plant, and were the same used in both schools.
“We assert that improper installation methods contributed to the rejection of the installation at Foley Middle School. Upon visual examination of the job prior to tear out, it was evident that the grout joints were significantly smaller than the 3/8" joint recommended by the manufacturer. Also, in conversation with the installers we were told that they used 1/4" trowels to set these tiles, half the size of the 1/2" trowel knot size recommended by the manufacturer.
“This same material was installed by an Atlanta based contractor in the Fair-hope Middle School without incident and was accepted by the general contractor and the County Board of Education. The material provided on both school jobs was manufactured at the same time and both jobs shipped from the same production run.
“The architect, Goodwyn, Mills & Ca-wood of Alabama, specified the Seneca Tiles used on both jobs and accepted the material as properly installed on the Fairhope Middle School [project].”

The trial court granted Delta’s motion for a partial summary judgment and certified that judgment as final under Rule 54(b), Ala. R. Civ. P. The trial court subsequently granted summary-judgment motions filed by Pate, Western, and Delta’s guarantors. The trial court did not specify its reasons for granting any of the summary-judgment motions. Finish Line filed a postjudgment motion; after that motion was denied, Finish Line appealed to this court from the trial court’s judgments in favor of Pate and Western.

Standard of Review

Appellate review of a summary judgment is de novo. Ex parte Ballew, 771 So.2d 1040 (Ala.2000). A motion for a summary judgment is to be granted when no genuine issue of material fact exists and the moving party is entitled to a judgment as a matter of law. Rule 56(c)(3), Ala. R. Civ. P. A party moving for a summary judgment must make a prima facie showing “that there is no genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law.” Rule 56(c)(3); see Lee v. City of Gadsden, 592 So.2d 1036, 1038 (Ala.1992). If the movant meets this burden, “the burden then shifts to the nonmovant to rebut the movant’s prima facie showing by ‘substantial evidence.’ ” Lee, 592 So.2d at 1038 (footnote omitted). “[S]ubstantial evidence is evidence 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.” West v. Founders Life Assurance Co. of Florida, 547 So.2d 870, 871 (Ala.1989); see § 12 — 21—12(d), Ala.Code 1975.

Discussion

I.

This case arises under Ala.Code 1975, § 39-1-1 et seq., commonly known as the “little Miller Act.” Section 39-1-1 provides, in pertinent part:

“(a) Any person entering into a contract with an awarding authority in this state for the prosecution of any public works shall, before commencing the work, execute a performance bond, with penalty equal to 100 percent of the amount of the contract price. In addition, another bond, payable to the awarding authority letting the contract, shall be executed in an amount not less than 50 percent of the contract price, with the obligation that the contractor or contractors shall promptly make payments to all persons supplying labor, materials, or supplies for or in the prosecution of the work provided in the contract and for the payment of reasonable attorneys’ fees incurred by successful claimants or plaintiffs in civil actions on the bond.
“(b) Any person that has furnished labor, materials, or supplies for or in the prosecution of a public work and payment has not been made may institute a civil action upon the payment bond and have their rights and claims adjudicated in a civil action and judgment entered thereon.”

The statute is patterned after the federal “Miller Act,” 40 U.S.C. §§ 3131-3133, see Federal Ins. Co. v. I. Kruger, Inc., 829 So.2d 732, 734 (Ala.2002), and “[t]he construction given to the federal act has been adopted in Alabama, unless otherwise noted,” Kruger, 829 So.2d at 734 n. 1. In Safeco Insurance Co. of America v. Graybar Electric Co., 59 So.3d 649 (Ala.2010), our supreme court explained the history and purpose of the little Miller Act:

“Generally, when a person has provided labor or materials or has supplied services on a private construction project, the person is entitled under § 35 — 11— 210, Ala.Code 1975, the mechanic’s or materialman’s lien statute, to file a lien against the private property and subsequently to foreclose on the property, if not paid for those services. However, § 35-11-210 does not apply to public property. Martin v. Holtville High School Bldg., 226 Ala. 45, 145 So. 491 (1933) (public-school building was not subject to foreclosure sale under the predecessor statute to § 35-11-210). The Alabama Legislature provided a remedy in 1927 when it codified specific provisions to ensure that materialmen receive full payment for labor or materials supplied on a public-works project. § 39-1-1. Alabama’s statute was patterned after a federal act enacted in 1894 called the Heard Act. Ch. 280, 28 Stat. 278 (1894) (since repealed); see also State v. Southern Sur. Co., 221 Ala. 113, 127 So. 805 (1930) (discussing the essential provisions of the state and federal payment-bond statutes existing in 1930). Alabama first amended its public-works-payment-bond statute in 1935 to pattern it after the federal act called the Miller Act (enacted in 1935 to rectify inadequate protections in the Heard Act). See 40 U.S.C. §§ 3131-3133 (formerly 40 U.S.C. §§ 270a-270d).
‘“[T]he purpose of a payment bond required under the little Miller Act is to “shift the ultimate risk of nonpayment from workmen and suppliers to the surety.” ’ Kruger, 829 So.2d at 736 (quoting American Sur. Co. v. Hinds, 260 F.2d 366, 368 (10th Cir.1958)). ‘The purpose of the [little Miller] act is to provide security for those who furnish labor and material in performance of government contracts as a substitute for unavailable lien rights, and is liberally construed to accomplish this purpose.’ Headley v. Housing Auth. of Prattville, 347 So.2d 532, 535 (Ala.Civ.App.1977).”

59 So.3d at 655-56.

Finish Line argues that the trial court erred in entering summary judgments in favor of Pate and Western because, Finish Line says, it established a right to payment in the amount of $34,123.12 by demonstrating, pursuant to § 39-1-1 (b), that it had “furnished ... materials [valued at $34,123.12] ... for or in the prosecution of a public work and payment has not been made.” Citing Riley-Stabler Construction Co. v. Westinghouse Electric Corp., 396 F.2d 274 (5th Cir.1968), Columbus Rock Co. v. Alabama General Insurance Co., 153 F.Supp. 827 (M.D.Ala.1957), A.G. Gaston Construction Co. v. Hicks, 674 So.2d 545 (Ala.Civ.App.1995), and S T Bunn Construction Co. v. Cataphote, Inc., 621 So.2d 1325 (Ala.Civ.App.1993), Finish Line contends that it sought payment for flooring materials that it supplied for, and that were incorporated into, the construction of the Foley Middle School, but for which it had not been paid.

The two federal cases, as well as this court’s Cataphote decision to which Finish Line directs our attention, dealt with a supplier’s right to payment for materials that were allegedly furnished to a contractor in good faith, but that were diverted by the contractor to other projects, without the knowledge or consent of the supplier. This court’s decision in Hicks dealt with a supplier’s having performed only part of the contract in a satisfactory manner, performance as to which, the trial court held, the supplier was entitled to part payment “[bjecause the contract was based on payment per unit price [and] ... was severa-ble.” 674 So.2d at 547. The decisions upon which Finish Line relies are wholly inapplicable because the defense of setoff was not asserted in any of them, as it was in this case.

Setoff is “ ‘a counter demand which the defendant [has] against the plaintiff arising out of a transaction extrinsic to the plaintiffs cause of action.’ ” Romar Dev. Co. v. Gulf View Mgmt. Corp., 644 So.2d 462, 468 (Ala.1994) (quoting T. Waterman, A Treatise on the Law of Set-Off, Recoupment and Counter Claim § 2 at 3 (2d ed. 1872)). Recoupment, on the other hand,

“authorizes the recovery of any damages sustained by the defendant, which grow out of, or are connected with, the matters set forth in the plaintiff’s complaint, and in breach of the contract upon which his suit is founded, or in violation of any duty imposed by the contract.”

Ewing & Gaines v. Shaw & Co., 83 Ala. 333, 335, 3 So. 692, 693 (1888) (emphasis added). In United Structures of America, Inc. v. G.R.G. Engineering, S.E., 9 F.3d 996 (1st Cir.1993) (“G.R.G.”), then Chief Judge Stephen G. Breyer, writing for the United States Court of Appeals for the First Circuit, explained the distinction more colloquially:

“If Smith sues Jones for $10,000 for grain that Smith supplied, and Jones seeks to reduce the judgment by $5,000 representing Smith’s (unrelated) unpaid rental of Jones’ summer cottage, Jones is seeking a setoff. ‘Recoupment,’ on the other hand, is ‘a reduction or rebate by the defendant of part of the plaintiffs claim because of a right in the defendant arising out of the same transaction.’ [Black’s Law Dictionary ] at 1147 [ (5th ed.1979) ] (emphasis added). If Smith sues Jones for $10,000 for grain that Smith supplied, and Jones seeks to reduce the judgment by $5,000 representing Jones’ expenditure to dry out Smith’s (defectively) wet grain (or the cost of buying replacement grain, or the grain’s lost value), Jones is seeking a recoupment.”

9 F.3d at 998.

In the absence of privity of contract, one may not assert a setoff defense to a Miller Act claim. United States ex rel. Martin Steel Constructors, Inc. v. Avanti Constructors, Inc., 750 F.2d 759 (9th Cir.1984) (“Avanti”), cert. denied, 474 U.S. 817, 106 S.Ct. 60, 88 L.Ed.2d 49 (1985) (general contractor not entitled to assert setoff against supplier’s claim, absent privity of contract between general contractor and supplier). One federal court has explained that the privity rule for setoff claims is based on the policy of the Miller Act to provide a simple and efficient means by which subcontractors and suppliers can receive payment and that litigation of a totally unrelated matter would be “contrary to the Miller Act’s purpose” because it could potentially “delay and complicate significantly any recovery” by a Miller Act plaintiff. United States ex rel. Acoustical Concepts, Inc. v. Travelers Cas. & Sur. Co. of America, 635 F.Supp.2d 434, 440 (E.D.Va.2009). In our judgment, the setoff defense asserted by Pate and Western in the present case is more correctly characterized as a defensive claim of recoupment or, more precisely, a compulsory counterclaim.

In G.R.G., supra, a supplier provided steel to a subcontractor for two separate construction projects on which G.R.G. Engineering, S.E., was the general contractor: a naval station for the United States government and a police station for the government of Puerto Rico. The first project was governed by the Miller Act and the second project by Puerto Rico’s “little Miller Act.” When the subcontractor failed to pay the supplier in full for the steel it had supplied, the supplier sued G.R.G. and its surety. G.R.G. asserted that it was entitled to a setoff against the amounts claimed by the supplier because, G.R.G. maintained, some of the steel supplied had been defective and G.R.G. had been required to spend additional sums to correct those defects. Relying on Avanti, supra, the district court entered a summary judgment for the supplier. The First Circuit Court of Appeals disagreed and reversed, concluding that the claim asserted as “set-off” in Avanti had actually been a claim of recoupment. The court discussed the distinction between setoff and recoupment and explained the significance of that distinction in Miller Act cases:

“Th[e] distinction [between setoff and recoupment], although somewhat technical, is well established in the law. See, e.g., In re B & L Oil Co., 782 F.2d 155, 157 (10th Cir.1986); 1 David G. Epstein et al., Bankruptcy § 6-45, at 703 (1992) (‘setoff involves mutual debts arising from unrelated transactions and re-coupment covers reciprocal obligations arising out of the same transaction ’) (footnotes omitted); Michael E. Tigar, Comment, 53 Cal. L.Rev. 224, 225 n. 9 (1965) (‘ “Recoupment is contradistin-guished from setoff in these ... essential particulars: 1st. In being confined to matters arising out of, and connected with, the transaction or contract upon which the suit is brought....’” (quoting Waterman, Set-Off, Recoupment and Counterclaim § 480 (2d ed. 1872))). See generally 20 Am.Jur.2d Counterclaim, Recoupment, and Setoff §§ 11, 16-18 (1965).
“This technical legal terminology does not necessarily reflect ordinary usage .... Lawyers, too, might fall into [an imprecise] manner of speaking, for often the technical legal distinction does not matter. See, e.g., B & L Oil, 782 F.2d at 157 (‘Modern rules of pleading have diminished the importance of the common-law distinctions surrounding recoupment and its companion, setoff.’); 20 Am. Jur.2d § 10 (1965) (‘The distinctions between ... recoupment and setoff are no longer of much importance....’). In a few specialized circumstances, however, the difference takes on more significance.
“One such circumstance is bankruptcy....
“The Miller Act seems to us to offer another situation in which one should distinguish setoff from recoupment. The language of the Act permits a supplier to recover, not the full contract price, but the ‘sums justly due him.’ 40 U.S.C. § 270b(a).[] In our view, the aim of recoupment, ‘do[ing] justice in view of the one transaction as a whole,’ Rothensies [v. Elec. Storage Battery Co.], 329 U.S. [296,] 299, 67 S.Ct. [271], 272 [ (1946) ], would seem to match the statute’s requirement of determining the sums ‘justly due’ a supplier, making re-coupment an appropriate defense in Miller Act cases. Indeed, we do not see how the full contract price of goods supplied can possibly be ‘justly due’ a person who supplied defective goods. Set-off, on the other hand, has less bearing on whether a particular sum is ‘justly due’ the claimant, since setoff functions mostly as a convenient method of dealing with mutual, unrelated debts. Since a true setoff is not before us, however, we need only note the difference and need not go beyond the subject of re-coupment to consider when or whether setoff is unavailable under the Miller Act.
“Further, the policies underlying the Miller Act seem to permit recoupment. The Act is intended ‘to protect those whose labor and materials go into public projects,’ Clifford F. MacEvoy Co. v. United States ex rel. Calvin Tomkins Co., 322 U.S. 102, 107, 64 S.Ct. 890, 893, 88 L.Ed. 1163 (1944), but this ‘protection]’ does not include payments to which the supplier’s underlying contract does not entitle him. We know this is true because a Miller Act claim brought by a subcontractor who is in privity with the general contractor ‘is subject to reduction’ for ‘defective articles or work,’ even though the subcontractor’s ‘labor and materials’ were as much a part of the project as were those of an out-of-privity supplier. 8 John C. McBride & Thomas J. Touhey, Government Contracts § 49.490[4], at 49-658 (1993); see, e.g., United States ex rel. Browne & Bryan Lumber Co. v. Massachusetts Bonding & Ins. Co., 303 F.2d 823, 828 (2d Cir.), cert. denied, 371 U.S. 942, 83 S.Ct. 317, 9 L.Ed.2d 276 (1962); United States ex rel. Acme Maintenance Engineering Co. v. Wunderlich Contracting Co., 228 F.2d 66, 68 (10th Cir.1955) (defense of defective workmanship available against subcontractor; failed in this case because general contractor did not meet its burden of proof). We do not understand why the existence or nonexistence of privity of contract should make any difference with regard to these general policies. Nor do we understand how permitting a general contractor to reduce a supplier’s claim by the amount that the general contractor spent remedying the supplier’s failure to comply with his contract somehow ‘unduly burdens’ the supplier’s Miller Act rights. But cf. Avanti, 750 F.2d at 762. On the contrary, disallowing recoupment would seem to give the supplier ‘rights’ to which his contract does not entitle him.
“In short, neither [the supplier] nor the Avanti court itself has pointed to any policy of the Miller Act which would be served by the Avanti rule, nor can we imagine what such a policy would be. We have examined the legislative history of the Miller Act, and the cases and treatises discussing it, but we have found nothing that suggests the conclusion reached in Avanti The materials and policies we have considered, and the language of the statute, point the other way.
“For these reasons, we conclude that the general contractor in this case is entitled to assert a recoupment type of defense. Insofar as GRG shows that [the supplier] delivered defective goods that failed to meet contract specifications, and proves reasonably foreseeable damages caused by those defects, GRG may reduce the award to [the supplier] by the amount of those damages.
“[The supplier] also asserted a claim under Puerto Rico’s Little Miller Act (for the police station project). Our review of that Act has suggested no reason why the result should be different.”

G.R.G., 9 F.3d at 998-1000. See also United States ex rel. Tennessee Valley Marble Holding Co. v. Grunley Constr., 433 F.Supp.2d 104, 116 (D.D.C.2006) (adopting the “rule laid out in G.R.G.: the absence of privity between the general contractor and the supplier does not preclude the general contractor from seeking recoupment for defective materials as a defense to the supplier’s claim under the Miller Act”).

In the present case, both the general contractor (Pate) and the subcontractor (Delta) asserted the absence of privity with Finish Line; each claimed that the other had ordered the flooring materials from Finish Line, and, therefore, was responsible to pay Finish Line for the flooring materials Finish Line had supplied to the construction project. The record does not contain a written contract between Finish Line and either Pate or Delta. We surmise that Pate’s lack-of-privity argument is based on the logic that a flooring-materials supplier (like Finish Line) would not have extended credit to a flooring subcontractor (like Delta), as the evidence in this case indicates that it did, unless the flooring subcontractor had agreed to purchase flooring materials from the supplier. And we further surmise that Delta’s lack-of-privity argument is based on the fact that Pate signed the purchase-order forms as the purchasing agent for the Board in order to avoid sales taxes. See State Dep’t of Revenue v. Kelly Supply Co., 390 So.2d 650 (Ala.Civ.App.1980) (holding that, because general contractor acted as nonprofit association’s agent in purchasing building materials from supplier for use on construction project for the association, supplier did not owe the State or the municipality sales taxes on materials that supplier sold to general contractor for use in the project).

We need not resolve the privity-of-contract issue in this case because we hold (a) that the setoff defense asserted by Pate and Western is actually a counterclaim in the nature of recoupment and (b) that a general contractor may assert, in defense of a little Miller Act claim, recoupment against a supplier even in the absence of privity. Accordingly, we conclude that the trial court could properly enter a summary judgment in favor of Pate and Western on Finish Line’s little Miller Act claims against them.

II.

Our discussion in Part I is based upon the premise that, in entering the summary judgments for Pate and Western on Finish Line’s complaint seeking payment under the little Miller Act, the trial court relied on the setoff defense asserted by Pate and Western in their answers — a defense that we consider a counterclaim in the nature of recoupment. Finish Line contends that the summary judgments in favor of Pate and Western were erroneous because, it says, there was a genuine issue of material fact as to the subject matter of the setoff— i.e., whether the tiles rejected by the architect were themselves defective or whether Delta’s installation of the tiles was improper.

That issue is properly before us despite the fact that Finish Line did not appeal from the partial summary judgment in favor of Delta. First, Finish Line’s factual assertions concerning Delta’s alleged improper installation of the tiles did not state an independent cause of action against Delta. That is so because Delta’s duty with respect to installation of the tiles ran to Pate and the Board, not to Finish Line, so that any alleged breach of that duty could not have provided Finish Line with a separate claim against Delta and could not have been encompassed within the trial court’s partial summary judgment in favor of Delta. Instead, Finish Line’s factual assertions concerning Delta’s alleged improper installation of the tiles merely provided the basis for Finish Line’s answer to Pate and Western’s counterclaim seeking to recoup the amount that Pate had paid for the tiles that had been supplied by Finish Line and rejected by the project architect. See Hanover Ins. Co. v. Alisa Constr. Co., 14 Misc.3d 864, 867, 881 N.Y.S.2d 865, 868 (Sup.Ct.2001).

Second, as we have noted supra, 90 So.3d at 752 n. 2, the trial court necessarily denied Pate’s cross-claims against Delta (which claims were based on Delta’s alleged breach of contract, breach of warranty, and contractual and common-law indemnity) when it entered the summary judgments in favor of Pate and Western and against Finish Line. Rule 4(a)(1), Ala. R.App. P., provides, in pertinent part, that “[o]n an appeal from a judgment or order a party shall be entitled to a review of any judgment, order, or ruling of the trial court.” Accordingly, we address whether Finish Line presented substantial evidence indicating that a genuine issue of material fact existed as to whether the materials it supplied were defective or whether Delta’s installation of the materials was improper.

Delta’s subcontract with Pate specified that “the work to be done by [Delta] ... includ[ed] all labor, materials, equipment ... and other items required” to complete the subcontract. Pursuant to paragraph 9 of the subcontract, Delta warranted “to the Owner, Architect and Contractor that materials and equipment furnished under this Subcontract” would be “of good quality.” Delta agreed that its receipt of payment was dependent upon “certificates of payment issued by the architect.” Paragraph 8 of the subcontract provided:

“Authority of Architect. The Architect will have the authority to reject work which does not conform to the Prime Contract. The Architect’s decisions on matters relating to aesthetic effect shall be final if consistent with the intent expressed in the Prime Contract.”

Alabama caselaw has upheld the right of contracting parties to agree that the decision of an expert such as an architect or engineer is final. See Alabama Chem. Co. v. International Agric. Corp., 215 Ala. 381, 110 So. 614 (1926); Catanzano v. Jackson, 198 Ala. 302, 73 So. 510 (1916); Shriner v. Craft, 166 Ala. 146, 51 So. 884 (1910); and Abercrombie & Williams v. Vandiver, 126 Ala. 513, 28 So. 491 (1900). Over a century ago, the Abercrombie court recognized the rule that

“the parties to a contract may stipulate that the estimate of the work done and the compensation due under it, to be made by a third party, shall be final and conclusive, and such stipulation is binding in the absence of fraud or bad faith.”

126 Ala. at 532, 28 So. at 496-97. In Shriner v. Craft, the court held:

“Where a building contract specially provides that the certificate of the architect shall be final and conclusive, it is conclusive and binding in its legal operation and effect on the parties to the contract, and can be impeached only for fraud, or such gross mistakes as would imply bad faith or a failure to exercise an honest judgment.”

166 Ala. at 158, 51 So. at 888. In Alabama Chemical, the court explained the reason for the fraud-or-bad-faith exception to the rule that an expert’s decision designated as “final” in the contract is binding upon the parties:

“Mere mistake or error in the decision of the umpire does not avoid it; if so, the purpose of the stipulation would fail, the right of contract denied, and the chosen means of avoiding controversy made the breeder of litigation. The importance of such provisions in the conduct of many lines of present day business demands that they be annulled only upon substantial and well-established legal grounds.”

215 Ala. at 383, 110 So. at 615. See also Tribble & Stephens Co. v. RGM Constructors, L.P., 154 S.W.3d 639, 653 (Tex.App.2004) (plurality opinion):

“[A]n architect’s decision cannot be set aside by proving that some other architect may have acted or decided an issue differently or ‘simply on a conflict of evidence as to what [ ]he ought to have decided. This must be true, because any other rule would simply leave the matter open for a court or jury to substitute its judgment and discretion for the judgment of the [architect].’ Westech Eng’g, [Inc. v. Clearwater Constructors, Inc.], 835 S.W.2d [190,] 203 [ (Tex.App.-Austin 1992) ] (quoting City of San Antonio v. McKenzie Constr. Co., 136 Tex. 315, 150 S.W.2d 989, 996 (1941)).”

Although Alabama appellate courts have not addressed the specific question whether a challenge to the factual basis for an architect’s decision under circumstances similar to the present case makes summary judgment inappropriate, the North Carolina Court of Appeals decided the issue in Top Line Construction Co. v. J.W. Cook & Sons, Inc., 118 N.C.App. 429, 455 S.E.2d 463 (1995). In that case, a subcontractor who had agreed to provide the labor and materials necessary to complete the masonry work in the construction of a middle school sued the general contractor who had refused to pay the subcontractor’s final bill for the 10% retainage fee withheld pursuant to the subcontract. The general contractor asserted the defense that the subcontractor had failed to perform the masonry work consistent with the requirements of the subcontract. In support of its motion for a summary judgment, the general contractor submitted a letter from the architect, stating that the masonry work was the “worst he had ever seen” in his 40 years as an architect. In opposition to the motion, the subcontractor submitted evidence indicating that the masonry work had been completed according to project specifications and that the general contractor had “approved the work on a weekly basis prior to payment.” 118 N.C.App. at 432, 455 S.E.2d at 465. Consequently, the subcontractor argued, the “credibility [of the architect] is at issue and cannot be resolved on summary judgment.” Id. The trial court entered a summary judgment for the general contractor, and the North Carolina appellate court affirmed, stating the following:

“The subcontract designates [the architect] as the judge of acceptable work. ‘[WJhere the contract provides that the work shall be done to the satisfaction, approval, or acceptance of an architect or engineer, ... the parties are bound by his decision, in the absence of fraud or gross mistake.’ Welborn Plumbing and Heating Co. v. Randolph County Board of Education, 268 N.C. 85, 90,150 S.E.2d 65, 68 (1966) (quoting 13 Am. Jur.2d Building, Etc. Contracts, § 34 (1964)). There is no evidence here of fraud or gross mistake. [The subcontractor] expressly agreed to be bound by this clause and [the general contractor] retained its right to recover damages for malperformance of the contract. Accordingly, there are no genuine issues of material fact. [The architect’s] judgment as to the quality of the masonry work is final as between the parties and [the general contractor] is entitled to recover from [the subcontractor] the amount it was backcharged by the school board. Summary judgment was properly entered against [the subcontractor].”

118 N.C-App. at 432-33, 455 S.E.2d at 465.

The North Carolina Court of Appeals has also held that, “[w]hen an architect is vested with the authority to render judgment on a contractor’s performance, the determination is prima facie correct, and the other parties have the burden of proving fraud or mistake.” Biemann & Rowell Co. v. Donohoe Cos., 147 N.C.App. 239, 243, 556 S.E.2d 1, 4 (2001) (citing Bolton Corp. v. T.A. Loving Co., 94 N.C.App. 392, 402, 380 S.E.2d 796, 803 (1989), quoting in turn Barnes Constr. Co. v. Washington Twp., 134 Ind.App. 461, 466, 184 N.E.2d 763, 764-65 (1962)). Because Finish Line neither alleged nor submitted evidence indicating that the architect’s decision was the product of fraud, bad faith, or gross mistake “as would imply bad faith or a failure to exercise an honest judgment,” Shriner v. Craft, 166 Ala. at 158, 51 So. at 888, the trial court was not presented with substantial evidence creating a genuine issue of material fact. Compare Richards & Assocs., Inc. v. Fidelity Sound, Inc., 137 Ga.App. 752, 753, 224 S.E.2d 832, 833 (1976) (“The defendant contends the architect had acted in bad faith or as a result of a gross mistake. If this be shown by the evidence, a jury issue would be made as to whether the architect had acted in bad faith, arbitrarily or capriciously, so as to amount to an abuse of his discretion.”).

For two reasons, we conclude that, for purposes of the recoupment claim asserted by Pate and Western, Finish Line is bound by the language in the subcontract between Pate and Delta that accords finality to the architect’s decision — notwithstanding the fact that Finish Line was not a party to the subcontract. First, the little Miller Act “does not require that the materialman be in privity of contract with the primary contracting parties,” SGB Constr. Servs., Inc. v. Ray Sumlin Constr. Co., 644 So.2d 892, 895 (Ala.1994) (citing Sumlin v. Hagan Storm Fence Co. of Mobile, 409 So.2d 818 (Ala.1982)). Second, “[t]he essence of [the] policy [of the Miller Act] is to provide a surety who, by force of the Act, must make good the obligations of a defaulting contractor to his suppliers of labor and material.” United States ex rel. Sherman v. Carter, 353 U.S. 210, 216-17, 77 S.Ct. 793, 1 L.Ed.2d 776 (1957) (emphasis added). It is undisputed that, before the architect rejected the Seneca tiles supplied by Finish Line, Pate had already paid Finish Line $39,075 for those tiles, and after the architect rejected the Seneca tiles, Pate obtained and paid for replacement tiles. If Pate can rely upon the finality of the architect’s decision, then it is not a “defaulting contractor” because it is entitled to deduct from the purchase price of other flooring materials supplied by Finish Line the amount it spent to cure the defects in the Seneca tiles supplied by Finish Line. See G.R.G, 9 F.3d at 1000 (stating that, “[ijnsofar as [the general contractor] shows that [the supplier] delivered defective goods that failed to meet contract specifications, and proves ... damages caused by those defects, [the general contractor] may reduce the award to [the supplier] by the amount of those damages”).

The judgment of the Baldwin Circuit Court is affirmed.

AFFIRMED.

THOMPSON, P.J., and THOMAS, J., concur.

BRYAN, J., concurs in part and concurs in the result, with writing.

MOORE, J., concurs in the result, without writing.

BRYAN, Judge,

concurring in part and concurring in the result.

I fully concur in Part I of the main opinion; however, with respect to Part II of the main opinion, I concur in the result only.

In support of their summary-judgment motions, J.F. Pate & Associates Contractors, Inc. (“J.F. Pate”), and Western Surety Company (“Western Surety”) submitted the affidavit of John A. Pate, the chief operating officer of J.F. Pate. In pertinent part, Pate’s affidavit stated:

“Seneca quarry tiles were provided by The Finish Line to Delta Flooring pursuant to a purchase order issued by the Board of Education pursuant to the Delta Flooring subcontract. Delta Flooring installed some of these tiles in the gymnasium canteen of the Foley Middle School.
“I attended a meeting on May 8, 2008 at the school to inspect the tiles as installed. This meeting was attended by representatives of The Finish Line, J.F. Pate, the architect and Delta Flooring. Extensive warping of the tiles was very evident, and the tiles appeared to me to be clearly defective and unacceptable. The project architect declared the tiles defective and unacceptable. The Finish Line representative requested an opportunity to provide a mock-up to demonstrate a solution to the unacceptable and extreme warpage problem. Nine tiles were selected at random from several boxes for this mock-up.
“On or about May 14, 2008, the Finish Line representative produced the mockup with these nine tiles installed. Again, the defective condition and extreme warpage of the tiles was clearly evident. It was evident that the tiles could not be installed so as to avoid a trip hazard.”

(Emphasis added.) The portions of Pate’s affidavit emphasized above constituted substantial evidence indicating that the tiles were defective. The Finish Line d/b/a Clay, Metal and Stone (“Finish Line”) submitted three tardy affidavits in opposition to J.F. Pate’s and Western Surety’s summary-judgment motions. J.F. Pate and Western Surety moved the trial court to strike those affidavits on the ground that they were tardy, and the trial court struck them. Thus, Pate’s affidavit testimony establishing that the tiles were defective was undisputed.

In my opinion, J.F. Pate and Western Surety’s submission of Pate’s undisputed affidavit testimony establishing that the tiles were defective disposes of Finish Line’s contention that a genuine issue of material fact exists regarding whether the tiles were defective without the need to reach the issues discussed in Part II of the main opinion.

      . Although Finish Line had not alleged in its complaint that Delta’s faulty installation of the Seneca tiles was the reason for the architect’s rejection of those tiles, Delta’s answer asserted that Delta had assumed that Finish Line was claiming that Delta "is liable for the Board’s nonpayment of Finish Line....”

      . Notwithstanding the fact that the trial court did not expressly rule on Pate's cross-claims against Delta, and did not certify the summary judgments in favor of the remaining defendants as final, the judgments appealed from are final. Pate’s cross-claims against Delta, being contingent upon the liability of Pate to Finish Line, were necessarily denied when the trial court entered a summary judgment in favor of Pate and against Finish Line. See Franklin v. Mitchell, 87 So.3d 573, 577 n. 2 (Ala.Civ.App.2011).

      . Although Pate and Western asserted the affirmative defense of setoff in their answers, the summary-judgment motions they filed did not argue setoff as a basis for granting the motions. At oral argument before this court on January 11, 2012, however, counsel for Pate and Western stated that the setoff issue was the focus of the argument before the trial court at the hearing on Pate’s and Western's summary-judgment motions. Counsel who appeared for Finish Line at oral argument before this court stated that he had not been present when the summary-judgment motions were argued in the trial court.
      In their appellate briefs, all the parties acknowledge that the trial court had no basis except setoff upon which to enter a summary judgment in favor of Pate and Western. Finish Line says that, “for the trial judge to arrive at the decision that he did, ... the judge had to accept Pate’s position that this offset should be allowed.” Pate and Western say that ”[t]he unopposed facts before the trial court support the finding [that] Pate, [and] Western ... were due setoff as a consequence of the breach of contract by Finish Line and Finish Line’s failure to provide materials conforming to the project specifications.”

      . “Among the changes effected in 1973 by the Rules [of Civil Procedure] was the ‘modernization of terminology.’ Ala. R. Civ. P. 81(e). Specifically, Rule 81(e) converts the terms 'recoupment' to 'compulsory counterclaim,' and 'set-off to ‘permissive counterclaim.’ ” Romar Dev. Co. v. Gulf View Mgmt. Corp., 644 So.2d at 470.

      . The Miller Act was amended in 2002. The current version, found at 40 U.S.C. §§ 3131— 3133, does not contain the phrase "justly due.”
      "Although the current version of the Miller Act does not use the phrase 'justly due’ as did its predecessor, the 2002 amendments were not meant to substantively change the statute. H.R.Rep. No. 107-479, at 2 (2002), reprinted in 2002 U.S.C.C.A.N. 827, 827-28. The changes in language merely resulted from consolidating related provisions of law, the pursuit to achieve uniformity within the title, or to conform to common contemporary usage. Id. Therefore, the First Circuit's reliance [in G.R.G.] on the phrase 'justly due' in reaching its conclusion need not affect the Court’s reasoning; the Court's interpretation of the Miller Act’s underlying policies still serves as valuable persuasive authority because the 2002 amendments to the Miller Act did not change the substance of the statute.”

        United States ex rel. Tennessee Valley Marble Holding Co. v. Grunley Constr., 433 F.Supp.2d 104, 116 n. 3 (D.D.C.2006).