text:
    PARKER TOWING COMPANY, INC. v. TRIANGLE AGGREGATES, INC.
    1100510.
    Supreme Court of Alabama.
    Dec. 13, 2013.

      Hamp Uzzelle of Hand Arendall LLC, Mobile, for appellant.
    Bert P. Taylor and Abigail Lounsbury Morrow of Taylor Ritter, P.C., Orange Beach, for appellee.
   MURDOCK, Justice.

Parker Towing Company, Inc. (“Parker Towing”), appeals from a judgment of the Clarke Circuit Court denying Parker Towing’s cross-claim for indemnity from Triangle Aggregates, Inc. (“Triangle”). We affirm the judgment in part and reverse it in part.

I. Facts and Procedural History

Parker Towing owned a 40-acre parcel of property in Clarke County, which it mined for sand and gravel. Parker Towing’s property is adjacent to property owned by Betty Jo Haynie, Wynona Belle G. Crosby, Mary Allison Haynie, Elizabeth Haynie Wainstein, and Joe Mills (collectively “the landowners”). In 1996, 1998, and 2002, Parker Towing entered into a series of lease agreements whereby it leased various parcels of real property from the landowners (“the leased properties”). The purpose of the leases, each of which by its terms was for a period of two years, was to enable Parker Towing to mine sand and gravel from the leased properties.

After each lease expired, Parker Towing continued mining on the property covered by the respective leases with the knowledge, permission, and consent of the landowners. Parker Towing also continued to make payment to the landowners as otherwise would have been required under the relevant leases. According to Parker Towing, it is a common practice that sand and gravel leases continue after their stated termination date with the permission and consent of the property owners, but without extending the leases in writing. Each of the lease agreements provided that Parker Towing would perform reclamation of the property covered thereby upon the expiration of the lease, with such reclamation to include the planting of pine seedlings within one year after Parker Towing had ceased its mining operations on each parcel.

In May 2005, Parker Towing entered into an agreement to sell its 40-acre parcel of property and its machinery and equipment and related assets to Triangle. Te-rah Huckabee, who was a vice president of Parker Towing, and Benny Chinnis, who was a vice president of Triangle, negotiated the sales agreement between Parker Towing and Triangle. The agreement provided, in pertinent part, for the transfer of “any remaining interest” Parker Towing held in the landowners’ leases, and the agreement further provided:

“Buyer [Triangle] agrees to perform any requirements remaining open under said lease including but not limited to reclamation of all previously mined and un-reclaimed property. Buyer agrees to indemnify and hold Seller [Parker Towing] harmless from any claims, demands or actions made against Seller for performance of said requirements even if they are deemed non-transferable under the now expired lease.”

After the sale to Triangle, Parker Towing discharged all of its employees who had been assigned primarily to the mining operation on the leased properties. Triangle then hired all the discharged Parker Towing employees. Thereafter, Triangle continued to mine the leased properties, and it also continued certain reclamation work on the leased properties that had been initiated by Parker Towing. After the sale, Parker Towing conducted no further operations on the leased properties, and none of its employees or agents went to the properties except Huckabee, who went twice to conclude matters relating to the sale to Triangle.

In addition to mining on the leased properties and on the land it had purchased from Parker Towing, Triangle apparently also mined certain property owned by the landowners that was not included in the lease agreements between the landowners and Parker Towing (“the nonleased property”).

In October 2006, the landowners sued Parker Towing, Triangle, Triangle Land, LLC (“Triangle Land”), Chinnis, and fictitiously named defendants. Count one of the complaint was based upon obligations arising under the lease agreements and stated:

“[The landowners] ... entered into a lease agreement for defendants or some of them to remove sand and gravel from a portion of the above described real estate. As a part of the consideration, defendants agreed to put the real property back into substantially its original condition for growing timber. Defendants have failed and refused to do so and have breached the agreement.”

Counts two through eight of the landowners’ complaint asserted claims against Parker Towing, Triangle, Triangle Land, Chinnis, and fictitiously named defendants, jointly and severally, based upon various torts they allegedly committed on the non-leased property. Count two alleged that the aforesaid defendants “trespassed” because they had

“intentionally, willfully and unlawfully entered and conducted a sand and gravel operation upon a portion of the real property described above, not included, in the lease agreement, with knowledge that they had no right to mine on said real property.”

(Emphasis added.) Count three alleged that the defendants had “negligently or wantonly entered upon real property belonging to the [landowners] on which defendants had no lease agreement” and that this property was damaged as a proximate result of such negligence and wantonness. Count four alleged that the defendants “unlawfully bulldozed the real property, cut and cleared trees, and unlawfully occupied the subject real property.” Count five alleged that the defendants had “intentionally, willfully and unlawfully taken a portion of [the landowners’] real property without [the landowners’] consent and against [the landowners’] will.” Count six alleged that the defendants had committed “outrageous conduct” as to the landowners’ legal rights. Count seven included a claim for damages for mental anguish based on the defendants’ trespass, and count eight alleged that the defendants “independently and through imputation, were wanton, willful and grossly negligent, the proximate result of which [the landowners] have suffered actual damages.”

Parker Towing filed a cross-claim against Triangle seeking indemnity for any losses it might incur as a result of any failure by Triangle to have reclaimed the leased properties as alleged in count one of the landowners’ complaint, including all costs and expenses incurred by Parker Towing in defending against the landowners’ claims. Parker Towing also filed a motion for a summary judgment on its cross-claim against Triangle in which it asserted that Triangle was contractually obligated to indemnify Parker Towing against any losses, including attorney fees and expenses, Parker Towing might incur as a result of any failure by Triangle to have performed the reclamation of the leased properties in a timely manner.

As to the nonleased property and counts two through eight of the complaint, Parker Towing filed a motion for a partial summary judgment against the landowners. The landowners filed a response to that motion, arguing that

“it appears that Parker’s position is that it is not liable for any intentional or negligent acts on the part of Triangle with respect to Triangle’s activities on [the landowners’] land not included in the [the landowners’] lease with Parker. In its Motion, Parker contends that it is not liable for any actions on the part of Triangle after it sold its land to Triangle and Triangle began its activities on [the landowners’] land. Parker, however, overlooks the extent of its duties and responsibilities to [the landowners] upon the assignment of its lease to Triangle.
“In the instant case, Parker simply assigned its rights and duties to Triangle without any notice to [the landowners]. Parker’s employees became employees of Triangle, and the activities on [the landowners’] property continued. During this period, Triangle began to trespass on additional property owned by [the landowners] without the [the landowners’] consent. From [the landowners’] perspective, Triangle and Parker are one in the same — Triangle has the same employees as Parker and Triangle continued doing the same work as Parker. When Triangle trespassed onto land not included in the lease between Parker and [the landowners], Parker remained liable to [the landowners] along with Triangle.
“Parker ... remains liable to [the landowners] for the actions of Triangle, its assignee. It cannot escape liability for the torts of Triangle by hiding behind the assignment. Parker is, in essence, one and the same with Triangle with respect to any torts committed by Triangle against [the landowners], and is jointly and severally liable for Triangle’s torts.”

(Emphasis added.)

The trial court denied both of Parker Towing’s summary-judgment motions. Thereafter, Parker Towing amended its cross-claim against Triangle to add a claim for indemnity in the event Parker Towing were to be held hable for actions of Triangle with respect to the nonleased property.

Sometime after depositions were taken in June 2008, Triangle paid the landowners, collectively, between $50,000 and $100,000 for the sand and gravel it had mined and removed. Triangle had not paid the landowners anything before that time.

In September 2008, Parker Towing’s liability-insurance carrier, Employers Mutual Casualty Company (“EMC”), filed a motion to intervene in the landowners’ action “for the limited purpose of determining whether there is insurance coverage for the claims alleged by the [landowners] against [Parker Towing].” In October 2008, the trial court entered an order granting EMC’s motion to intervene. EMC had issued two reservation-of-rights letters to Parker Towing, one dated November 2, 2006, and one dated September 21, 2007. The two letters contained similar language as to EMC’s proffering an attorney to defend Parker Towing against the landowners’ claims and as to EMC’s reservation of the right to deny coverage for liability as to the landowners’ claims. EMC’s September 21, 2007, reservation-of-rights letter to Parker Towing states that, although EMC was providing Parker Towing an attorney who would defend Parker Towing’s interests, EMC “reserve[d] the right to withdraw this defense at any time” and

“[bjecause of the coverage issues presented and those that may arise within the course of this litigation, [Parker Towing] may wish to consult with a personal attorney to advise [it]. However, EMC will be unable to pay the attorney fees of any personal attorney [Parker Towing] may select to represent [it].” Parker Towing hired Hamp Uzzelle, a

lawyer who had represented Parker Towing in the past, to defend it in the landowners’ action, reasoning that if EMC might not pay the claims against Parker Towing, Parker Towing should control the defense against those claims.

In April 2009, EMC entered into a settlement agreement with Parker Towing concerning the insurance-coverage dispute between them. Pursuant to the settlement agreement, EMC paid Parker Towing $25,000 in exchange for Parker Towing’s releasing EMC

“from any and all claims, demands, actions, causes of action, costs, expenses, attorney’s fees, judgments, settlements, sums of money, damages, and liabilities whatsoever, whether known or unknown, arising out of the State Court Civil Action (either those asserted or which could have been asserted in said State Court Civil Action).”

In conjunction with the settlement agreement between Parker Towing and EMC, the landowners also settled their claims against Parker Towing, Triangle, Triangle Land, and Chinnis. Triangle paid the landowners $75,000, and Parker Towing paid the landowners $25,000 (the same amount it had received from its settlement with EMC). The settlement agreement between the landowners and the various defendants specifically excluded any settlement of Parker Towing’s cross-claim against Triangle.

On May 28, 2009, the landowners, Parker Towing, Triangle, Triangle Land, and Chinnis filed a “Joint Stipulation of Dismissal With Prejudice” as to the landowners’ claims. The joint stipulation provided that “the Cross-Claim pending between Parker Towing Company, Inc., and Triangle ... is still active and due to remain as an active claim pending in this matter.” Thereafter, the trial court entered an order dismissing the landowners’ claims with prejudice. Before the dismissal of the landowners’ claims, the role played by the attorney retained by EMC to defend Parker Towing was limited; following the dismissal of the landowners’ claims, the role of the attorney retained by EMC ended altogether.

Parker Towing’s cross-claim against Triangle proceeded to a bench trial in October 2010. At trial, Parker Towing sought indemnity both for the $25,000 it had paid the landowners in settlement of their claims against Parker Towing and for its attorney fees and expenses in defending against the landowners’ claims. According to Parker Towing, Uzzelle’s fee for defending the landowners’ claims against Parker Towing was $39,364.40, and court-reporter fees were $944.55. After receiving ore tenus evidence, the trial court entered a judgment in favor of Triangle and against Parker Towing as to all claims asserted by Parker Towing -in its cross-claim. Parker Towing appeals from the trial court’s final judgment.

II. Standard of Review

“ ‘ “When a judge in a nonjury case hears oral testimony, a judgment based on findings of fact based on that testimony will be presumed correct and will not be disturbed on appeal except for a plain and palpable error.” ’ Smith v. Muehia, 854 So.2d 85, 92 (Ala.2003) (quoting Allstate Ins. Co. v. Skelton, 675 So.2d 377, 379 (Ala.1996)); see also First Nat’l Bank of Mobile v. Duckworth, 502 So.2d 709 (Ala.1987). As this Court has stated,

“ ‘ “The ore tenus rule is grounded upon the principle that when the trial court hears oral testimony it has an opportunity to evaluate the demeanor and credibility of witnesses.” Hall v. Mazzone, 486 So.2d 408, 410 (Ala.1986). The rule applies to “disputed issues of fact,” whether the dispute is based entirely upon oral testimony or upon a combination of oral testimony and documentary evidence. Bom v. Clark, 662 So.2d 669, 672 (Ala.1995). The ore tenus standard of review, succinctly stated, is as follows:
“ ‘ “[W]here the evidence has been [presented] ore tenus, a presumption of correctness attends the trial court’s conclusion on issues of fact, and this Court will not disturb the trial court’s conclusion unless it is clearly erroneous and against the great weight of the evidence, but will affirm the judgment if, under any reasonable aspect, it is supported by credible evidence.” ’
“Reed v. Board of Trs. for Alabama State Univ., 778 So.2d 791, 795 (Ala.2000) (quoting Raidt v. Crane, 342 So.2d 358, 360 (Ala.1977)). However, ‘that presumption [of correctness] has no application when the trial court is shown to have improperly applied the law to the facts.’ Ex parte Board of Zoning Adjustment of Mobile, 636 So.2d 415, 417 (Ala.1994).”

Robinson v. Evans, 959 So.2d 634, 637 (Ala.2006).

III. Analysis

Parker Towing contends that Triangle must indemnify it for the $25,000 it paid in settlement of the landowners’ claims against it and for the attorney fees and litigation expenses it incurred to defend itself against the landowners’ claims. We first address Parker Towing’s arguments regarding its claim for indemnification for the $25,000 paid to the landowners.

A. $25,000 Paid to the Landowners

Parker Towing first makes an argument for indemnification as to the $25,000 based on the tort claims against it in counts two through eight of the complaint relating to the nonleased property. It contends that the landowners’ theory was that, although Parker Towing itself did not engage directly in the allegedly tortious conduct, it was “vicariously” responsible for the tortious conduct of Triangle on the nonleased property. Parker Towing argues that the threat of being held vicariously liable for the actions of Triangle resulted in its payment of at least part of the $25,000 it paid the landowners in settlement of the claims against it and that, therefore, it should be entitled to indemnification by Triangle.

The trial court rejected this assertion, explaining:

“Reviewing the allegations asserted by the [landowners] against both Triangle and Parker, and considering the evidence produced by Parker at trial, it is the opinion of the Court that the claims asserted by the [landowners] against Parker were not based upon its alleged vicarious liability for the acts of Triangle. There is no allegation asserted by the [landowners] in their complaint against Parker or Triangle that Parker is vicariously liable for the acts of Triangle, nor that any agency relationship existed between Parker and Triangle for the alleged wrongful acts asserted by the [landowners]. It would appear the claims asserted by the [landoimers] against Parker and Triangle allege they were joint tort-feasors in connection with the claimed wrongful acts and should be held jointly and severally liable for damages arising out of said wrongful acts. Therefore, it does not appear to the Court that Parker has met its burden of proving to the reasonable satisfaction of the Court its claim that Triangle should indemnify it for damages incurred in connection with its defense of the [landowners] claims based upon a common law indemnity theory.”

We agree with the trial court that the tort claims against Parker Towing and Triangle in counts two through eight of the complaint with respect to the nonleased property are in the nature of allegations against joint tortfeasors. We also agree with the trial court that there is no theory of indemnity that may be applied in this case as between such joint tortfeasors.

The general rule in Alabama is that, in the absence of a statutory or contractual basis otherwise, there is no contribution or indemnity among joint tortfeasors. Ex parte Stenum Hosp., 81 So.3d 314, 318 (Ala.2011); Parker v. Mauldin, 353 So.2d 1375 (Ala.1977). In their response in the trial court to Parker Towing’s motion for a summary judgment as to counts two through eight, the landowners attempted to circumvent this general rule by arguing that Triangle was using the former employees of Parker Towing in its allegedly tortious conduct and that Parker Towing and Triangle were “one and the same.” As noted, Triangle also attempts to frame Parker Towing’s alleged liability to the landowners as having been “vicarious” in nature. For all that appears from the record, however, Triangle is an entirely separate corporation that purchased the assets of Parker Towing and subsequently hired its employees. We see no basis in the law for treating these two separate legal entities as a single entity for purposes of the tort allegations in the complaint. Likewise, we see no relationship between the two legal entities that could provide a basis for vicarious liability. Thus, any payment made by Parker Towing to the landowners based on either such argument could be seen only as “voluntary.” See discussion of the “voluntary payment doctrine,” infra.

The trial court also rejected Parker Towing’s claim for indemnification from Triangle for any portion of the $25,000 insofar as it related to the claims asserted by the landowners against Parker Towing in count one of the complaint relating to the reclamation of the leased properties. Parker Towing contends that Triangle was responsible for a breach of the reclamation obligation under the lease agreements assigned by Parker Towing to Triangle and that, at least to some extent, it made the $25,000 payment to the landowners to compensate for that breach. In rejecting this argument, the trial court noted that there was testimony to the effect that reclamation of the property had been completed by the time Parker Towing agreed to pay $25,000 in settlement of the landowners’ claims, i.e., some two and one-half years after the commencement of the lawsuit. The trial court cited the testimony of Benny Chinnis, a vice president of Triangle, to the effect that all reclamation of the leased properties had been completed at the time of the settlement and that there was no claim being pursued by the landowners against anyone for reclamation of the leased properties at that juncture. The trial court also relied upon the testimony of Terah Huckabee, a vice president of Parker Towing, whom the trial court understood as testifying that, at the time of settlement, there were no claims being pursued against Parker Towing in connection with the reclamation. The trial court concluded that, “therefore, the terms of any written indemnity agreement between Parker and Triangle had been satisfied and would not form the legal basis for recovery by Parker on its Cross-Claim against Triangle.”

Parker Towing contests these findings by the trial court, arguing, among other things, that Huckabee subsequently testified in a manner that appeared to contradict certain portions of his testimony relied upon by the trial court. Under the ore tenus rule, however, the deference owed the trial court’s factual findings, including the weight and credibility the trial court gives to certain testimony, prevents us from second-guessing the trial court’s factual findings in this regard. Accordingly, we find no basis on which to disturb the trial court’s conclusion that, at the time of the settlement of the underlying action, the landowners’ original claim for the cost of reclamation of the leased properties no longer provided a basis for the payment by Parker Towing of the $25,000. See generally Mount Airy Ins. Co. v. Doe Law Firm, 668 So.2d 584 (Ala.1995) (rejecting claim for indemnification on the ground that the party seeking the indemnification had voluntarily made the payments in question to another party to settle an underlying lawsuit). Parker Towing therefore was not entitled to indemnification of some of or all the $25,000 payment it made to the landowners pursuant to the written indemnity agreement between it and Triangle.

B. Attorney Fees and Litigation Expenses

We turn now to the issue of the recovery of the attorney fees and litigation expenses Parker Towing paid in the course of defending itself against the landowners’ claims. Parker Towing claims the right to be indemnified for its attorney fees and expenses under both the common law and its indemnification agreement with Triangle. Consistent with our conclusion in Part A above, we find no merit in the common-law indemnity claims asserted by Parker Towing. As discussed above, the landowners’ claims as to the nonleased property were in the nature of claims against Parker Towing and Triangle as joint tortfeasors. As discussed, there is no viable basis under Alabama law presented here for indemnification of any of or all the $25,000 payment made by Parker Towing to the landowners to the extent Parker Towing contends it was made in response to the claims by the landowners as to the nonleased property. A fortiori, there is no basis under Alabama law for a common-law indemnification for attorney fees as between joint tortfeasors in circumstances such as those presented here. See generally Jones v. Regions Bank, 25 So.3d 427, 441 (Ala.2009) (noting that “[i]t is well settled that ‘ “Alabama follows the ‘American rule,’ whereby attorney fees may be recovered if they are provided for by statute or by contract or if they are called for by special equity, such as in proceedings where the attorney’s efforts create a ‘common fund’ out of which fees may be paid”’” (quoting City of Bessemer v. McClain, 957 So.2d 1061, 1078 (Ala.2006), quoting in turn Battle v. City of Birmingham, 656 So.2d 344, 347 (Ala.1995))); Mitchell v. Huntsville Hosp., 598 So.2d 1358,1360 (Ala.1992) (to same effect).

In contrast to our conclusion as to Parker Towing’s common-law indemnification claim, we conclude that Parker Towing is in fact entitled to reimbursement by Triangle of at least a portion of its attorney fees and litigation expenses under its contractual indemnification agreement with Triangle.

As discussed in Part A above, the trial court concluded that, by the time the settlement agreement was entered into by the parties and Parker Towing agreed to pay the landowners $25,000, the landowners’ allegations regarding reclamation of the nonleased property no longer provided a basis for liability, i.e., for any payment of any portion of the $25,000. This does not mean, however, that Triangle was not in breach of its reclamation obligation at the outset of the litigation, some two and one-half years before the settlement. To the contrary, both parties and the trial court appear to accept as a given that reclamation had not been timely performed at that juncture and that there had been a breach of the reclamation obligation. Nor does it mean the landowners had not asserted a claim regarding the reclamation of the leased properties as to which Parker Towing needed to defend itself.

Nonetheless, the trial court rejected Parker Towing’s claim, reasoning that Parker Towing voluntarily chose “to assume the expense of litigation, even though EMC provided Attorney Patterson’s services to act as primary defense counsel at the expense of EMC.” With this as its predicate, the trial court invoked the “voluntary-payment doctrine,” see Mount Airy Ins. Co. v. Doe Law Firm, supra, to conclude that Parker Towing was not entitled to indemnity of its attorney fees even to the extent the fees were incurred in defending against count one of the complaint.

The voluntary-payment doctrine has no application in this context. The landowners sued Parker Towing, and Parker Towing had little choice but to engage in that litigation and to use counsel to defend itself against what was at the time a meritorious reclamation claim. Parker Towing, as it had every right to do, chose Uzzelle to represent it rather than relying on an attorney provided by its third-party insurer, EMC. That choice is not germane to the indemnity obligation between Triangle and Parker Towing. Triangle is a stranger to the EMC-Parker Towing insurance arrangement.

As a corollary, the trial court’s invocation of the voluntary-payment doctrine in this circumstance conflicts with the collateral-source rule. As this Court stated in Jones v. Crawford, 361 So.2d 518, 522 (Ala.1978):

“The courts of this state have held many times that what has occurred between insuror and insured is of no concern to the defendant — that the sum received from insurance cannot be shown in mitigation of damages for the injury.”

See also Sturdivant v. Crawford, 240 Ala. 383, 385, 199 So. 537, 538 (1940) (“The amount paid by the insurance company does not even affect the measure of recovery. The insurance of the property is a mere indemnity, and insurer and insured are regarded as one person. The mere fact that the insurer had paid the insured cannot affect the action against the wrongdoer who has destroyed or injured the property, the subject of the insurance.”).

Finally, although no question has been raised as to whether the amount of the attorney fees charged by Uzzelle were reasonable for the work he performed, Triangle does raise a question as to what portion of the attorney fees and other litigation expenses incurred by Parker Towing were attributable to its defense of the reclamation claim as to the leased properties. The entirety of Triangle’s argument in this regard reads as follows: “Parker had to defend the lawsuit as to Counts Two through Eight and has not put forth evidence it was incurring expenses specific to the reclamation claim — the only claim for which the sales agreement provided the potential for indemnification.”

Aside from the brevity of this “argument” and the lack of citation of any authority in connection therewith, we note that this argument was not asserted by Triangle in the trial court. This argument is of such a nature that, because it was not asserted in the trial court, it provides no alternative legal ground for the affirmance of the trial court’s judgment in this appeal. Liberty Nat’l Life Ins. Co. v. University of Alabama Health Servs. Found,., P.C., 881 So.2d 1013, 1020 (Ala.2003) (“[T]his Court will affirm the trial court on any valid legal ground presented by the record, regardless of whether that ground was considered, or even if it was rejected, by the trial court. Ex parte Ryals, 773 So.2d 1011 (Ala.2000), citing Ex parte Wiginton, 743 So.2d 1071 (Ala.1999), and Smith v. Equifax Servs., Inc., 537 So.2d 463 (Ala.1988). This rule fails in application only ivhere due-process constraints require some notice at the trial level, which was omitted, of the basis that would otherwise support an affirmance.... ” (emphasis added).)

Nonetheless, we conclude today that Parker Towing is entitled to indemnification by Triangle of its attorney fees and other litigation expenses to the extent incurred by Parker Towing to defend against the claims asserted against it under the reclamation provision of the lease agreements, but not to the extent incurred by Parker Towing to defend against the various tort claims asserted against Parker Towing and Triangle as joint tortfeasors. Accordingly, we reverse the judgment of the trial court to the contrary and remand this case for a determination as to what portion of the attorney fees and expenses incurred by Parker Towing would have been incurred by it even in the absence of the tort claims raised by the landowners. The trial court is instructed to enter a judgment in that amount in favor of Parker Towing.

IV. Conclusion

We affirm the trial court’s judgment to the extent that it concludes that Parker Towing is not entitled to indemnity for the $25,000 it paid the landowners in settlement of the claims against it. We reverse the trial court’s judgment with respect to its conclusion that Triangle is not required to indemnify Parker Towing for its attorney fees and other litigation expenses incurred to defend against the claims asserted against Parker Towing for breaches of the reclamation provisions in the lease agreements with the landowners. The fees and expenses incurred by Parker Towing as a result of those breaches are covered by the indemnification agreement between Parker Towing and Triangle. We remand the case for further proceedings and the entry of judgment consistent with this opinion.

AFFIRMED IN PART; REVERSED IN PART; AND REMANDED WITH INSTRUCTIONS.

STUART, BOLIN, PARKER, MAIN, and WISE, JJ., concur.

MOORE, C.J., and SHAW and BRYAN, JJ., concur in the result.

      . The lease agreements were executed in the name of Waterway Materials ("Waterway”); however, Waterway was, at all relevant times, an unincorporated division of Parker Towing.

      . The complaint initially named Triangle Land as Triangle Land, Inc., but the landowners amended the complaint to correct the misnomer. The complaint also named Waterway as a defendant under the mistaken impression that it was a separate legal entity. See supra note 1. In its answer to the complaint, Parker Towing explained that Waterway was merely a division of Parker Towing, a fact accepted by the landowners.

      . The landowners' complaint also included a claim against two bonding companies, Travelers Casualty and Surety Company of America (''Travelers”) and Farmington Casualty Company ("Farmington”), which had allegedly issued reclamation bonds as to Triangle or Triangle Land or both entities. The landowners subsequently dismissed the claim against Travelers and Farmington.

      . In September 2007, EMC had filed an action against Parker Towing and the landowners in the United States District Court for the Southern District of Alabama. In the federal action, EMC sought, in part, a determination "of all coverage issues as may exist under all the terms and provisions of the policy” it had issued to Parker Towing and whether EMC had "a duty to defend and/or indemnify” Parker Towing.

      . According to EMC, there was some question as to whether Parker Towing knew of the landowners’ "loss” and failed to disclose it when Parker Towing renewed its insurance policy with EMC for the years 2006 and 2007. Additionally, Triangle’s liability-insurance carrier, Pennsylvania National Mutual Casualty Insurance Company (“Pennsylvania National”), intervened in the landowners’ action for the "limited purpose” of determining its insurance-policy-coverage obligations to Triangle and Parker Towing. Pennsylvania National alleged that Parker Towing claimed it was an additional insured under Triangle’s liability-insurance policy, that Pennsylvania National was providing a defense to Triangle and Parker Towing under a reservation of rights, and that Pennsylvania National disputed coverage as to certain of the claims against Triangle and Parker Towing.

      . That is not to say that we see some factual basis in the record for concluding that Parker Towing was a joint tortfeasor with Triangle in relation to Triangle’s activities on the non-leased property; we do not. The point made in the text is merely that, even if the two were to be considered joint tortfeasors, there is no applicable legal theory of indemnity that might be applied in this case.

      . No argument is presented in this case that Parker Towing should be entitled to indemnification under any other asserted exception to the general rule against contribution and indemnity among joint tortfeasors. Among other things, no argument is presented that Parker Towing should be entitled to indemnification from Triangle under an active-passive theory of indemnity. See generally SouthTrust Bank v. Jones, Morrison, Womack & Bearing, P.C., 939 So.2d 885, 902 (Ala.Civ. App.2005) (referring to "[t]he active-versus-passive-negligence analysis used in Mallory Steamship Co. v. Druhan, 17 Ala.App. 365, 84 So. 874 (1920), [as] a well-established exception to the rule that joint tortfeasors may not claim indemnity against each other”).

      . In point of fact, Chinnis testified that the reclamation was all but completed in the spring of 2009, at the time of the settlement, with the only remaining step being the planting of pine trees, which all parties understood would have to wait until the fall because of weather conditions.

      . Of course, as this Court has previously noted, ‘‘[t]hough [the plaintiff] pleaded different theories of indemnification recovery, i.e., contract and common law, by definition it may still receive only one recovery for indemnification.” North Alabama Elec. Coop. v. New Hope Tel. Coop., 7 So.3d 342, 345 (Ala.2008).

      . As noted in Part I above, count one of the landowners’ complaint states, in part, as follows:
      "[The landowners] ... entered into a lease agreement for defendants or some of them to remove sand and gravel from a portion of the above described real estate. As a part of the consideration, defendants agreed to put the real property back into substantially its original condition for growing timber. Defendants have failed and refused to do so and have breached the agreement.”

      . Further, even if Parker Towing had used counsel paid by EMC, EMC presumably would have had a subrogation claim against Triangle for the costs incurred by it for that attorney’s services.

      .It also should be noted that there is no contention in this case that the language of the indemnification provision in the sales agreement between Triangle and Parker Towing was not broad enough to cover attorney fees and other litigation expenses that might reasonably be incurred by Parker Towing in defending against claims resulting from a breach by Triangle of obligations it assumed under the sales agreement. See generally 41 Am.Jur.2d Indemnity § 30 (2005) (observing that ”[w]here a party is contractually entitled to be held harmless, that party is entitled to its costs and attorney’s fees incurred to enforce the contractual indemnity provision”).


source: Caselaw Access Project

author: STUART,Justice.

license: Public Domain

text:
    HARDY CORPORATION v. RAYCO INDUSTRIAL, INC. Rayco Industrial, Inc. v. Hardy Corporation.
    1090988 and 1091041.
    Supreme Court of Alabama.
    Dec. 13, 2013.

      L. Graves Stiff III of Starnes Davis Florie LLP, Birmingham, for appellant/cross-appellee Hardy Corporation.
    Clark R. Hammond and William D. Jones III of Johnston Barton Proctor & Rose, LLP, Birmingham, for appel-lee/cross-appellant Rayco Industrial, Inc.
   STUART,Justice.

Gambro Renal Products, Inc. (“Gam-bro”), hired The Facility Group, Inc. (“TFG”), as the general contractor for the construction of a facility designed to produce kidney dialysis filters in Opelika (“the project”). TFG contracted with the Hardy Corporation (“Hardy”) for specialized piping work on the project. Absolute Welding Services, Inc. (“AWS”), is a subsidiary of Rayco Industrial, Inc. (“Rayco”), a sub-subcontractor hired by Hardy. Although the negotiations on the subcontract at issue in these appeals were between AWS and Hardy, the subcontract was executed by Rayco and Hardy.

Facts

On December 18, 2006, AWS submitted an offer to Hardy for a certain scope of welding work that specifically excluded passivation and the installation of pure-steam return (“PSR”) piping. Hardy required a performance bond; however, AWS was not approved for a performance bond. Therefore, on January 17, 2007, Rayco, which was preapproved for a performance bond, submitted an offer to Hardy on its letterhead with identical terms and exclusions as those set forth by AWS in its offer, with the exception of a minor price increase as a result of the required bond. On January 19, 2007, Hardy presented a subcontract to Rayco that provided that Hardy would pay Rayco $813,561 and Rayco would install sanitary pharmaceutical piping that would meet the requirements of specification 15202, which contains the high-purity piping and welding requirements for projects that undergo inspection by the United States Food and Drug Administration; specification 15202 requires passivation and the installation of PSR piping. Rayco and Hardy executed the subcontract, and, as Rayco neared the end of its scope of work under its understanding of the subcontract, an issue developed as to whether Rayco would provide the passivation and install the PSR piping as required by specification 15202.

The dispute centered upon whether the exclusion of passivation and the installation of PSR piping in Rayco’s January 17, 2007, offer was incorporated into the January 19, 2007, subcontract. Rayco admitted that after the dispute arose, “in the interest of assisting Hardy,” it obtained a quote from a “third-party vendor” for passivation, which Hardy refused to pay, and, according to Rayco, “[ajfter the passivation disagreement arose, Hardy refused to pay any of Rayco’s outstanding invoices for work performed on and goods purchased for the Project.”

On March 12, 2008, Rayco filed a complaint in the Lee Circuit Court against Hardy, Gambro, and 15 fictitiously named parties, seeking an accounting, a declaratory judgment, a reformation of the contract, and perfection of a lien. Rayco asserted claims for damages for breach of contract, unjust enrichment/quantum meruit, and “work and labor done.” On April 7, 2008, Hardy moved the Lee Circuit Court to dismiss the action against Hardy without prejudice or, alternatively, to sever and to transfer the action to the Jefferson Circuit Court based on the forum-selection clause of the subcontract specifying that all legal proceedings would be filed in the Jefferson Circuit Court. Hardy asserted that, although Rayco’s claims against Gambro were properly filed in the Lee Circuit Court, Hardy was not a necessary party in that litigation and the action in which it was a party, if not dismissed,- should be severed and transferred to the Jefferson Circuit Court. On May 20, 2008, the Lee Circuit Court granted the motion to transfer the action to the Jefferson Circuit Court.

On June 30, 2008, Hardy answered Rayco’s complaint, admitting and denying certain claims and asserting various affirmative defenses; Hardy also filed a counterclaim alleging that Rayco had breached the subcontract by failing to complete its obligations under the subcontract. Hardy further sought to add Rayco’s surety, Fidelity and Deposit Company of Maryland (“Fidelity”), as a counterclaim defendant and asserted that Fidelity had breached the subcontract performance bond. Hardy requested damages and costs and attorney fees. The trial court granted Hardy’s motion to add Fidelity as a counterclaim defendant. Fidelity answered Hardy’s counterclaim, admitting that it had entered into a subcontract performance bond with Rayco, denying that Rayco had defaulted or that it was obligated to take any action under the performance bond, and asserting various defenses.

On September 9, 2008, Rayco amended its complaint to name Travelers Casualty and Surety Company of America (“Travelers”) as a defendant. Rayco answered Hardy’s counterclaim, denying Hardy’s counterclaims and asserting various affirmative defenses. Travelers answered Rayco’s amended complaint admitting that it had issued a payment bond in favor of TFG and asserting various defenses.

On November 20, 2009, Rayco and Fidelity moved to strike Hardy’s claim for an award of attorney fees because, they said, Hardy had failed to provide certain requested discovery regarding the requested attorney fees and to identify the expert witness to testify regarding the reasonableness of the requested attorney fees for the trial.

On November 25, 2009, the trial court conducted a trial, at which ore tenus evidence was presented, and, on December 11, 2009, the trial court entered its judgment. The trial court found that on January 19, 2007, Rayco entered into a subcontract that included within its scope that all procedures, including passivation and the installation of PSR piping, necessary to a complete installation of piping to satisfy specification 15202 would be performed by Rayco; that Rayco had breached the subcontract; that Rayco owed Hardy for additional funds incurred with regard to passi-vation and the installation of PSR piping; that Hardy owed Rayco for change-order request numbers 2, 7, 8, 20, and 21 because those changes were performed at Hardy’s request or because of modifications in the plans that changed the scope of the plan; and that Hardy’s other five claims for additional funds incurred in its counterclaim were disallowed because either the work was outside Rayco’s scope of work or Hardy had failed to comply with the notice requirements of the subcontract. Specifically, the trial court held that Rayco had breached the subcontract by not performing the passivation and installing the PSR piping; that Hardy owed Rayco $108,498.78 in damages; that Rayco has a duty to give Hardy all close-out documents on the project that it produced or had produced during the performance of the subcontract; that, in light of its determination that Rayco had breached the subcontract but was awarded damages for certain additional funds incurred, Rayco was not entitled to an award under the theories of unjust enrichment/quantum meruit or for work and labor done; that Rayco was not entitled to have the subcontract reformed; and that Hardy was entitled to certain additional funds incurred that were authorized by the subcontract against the amount otherwise found to be due Rayco. The trial court painstakingly recounted the evidence upon which it relied. That recounting and its findings are as follows:

“1. [Hardy] invited an offer from [Ray-co] to perform the specification 15202 high purity piping work for the Gambro Plant in Opelika, Alabama, in either November or December 2006.
“2. [Rayco], through subsidiary AWS, on December 18, 2006, made an offer to [Hardy] to perform the said work for a subcontract fixed price of $810,000, the said bid excluded performance of the passivation process of the piping system once installed as is otherwise required by a 15202 installation.
“3. On December 20, 2006, the parties met and discussed [Rayco’s] offer. There is an even split in the evidence as to what transpired in the December 20, 2006 meeting. [Rayco’s] representative testified] that explicit reference was made to the fact that [Rayco] did not provide passivation services; that if [Hardy] insisted, then [Rayco] would subcontract out the work and include a mark up in its bid; and that [Hardy’s] representative demurred and stated that [Hardy] would seek another subcontractor to perform the work so as to save the mark up. [Hardy’s] representative to the said meeting, on the other hand, testified that passivation was not raised as a separate issue; that [Hardy] entered the meeting seeking a commitment from [Rayco] for a ‘turn key installation and that [Rayco] gave such an assurance.
“4. On January 17, 2007, [Rayco] submitted a bid in its own name, changing the amount of the bid to $813,561.00, with the same clarifications regarding passivation.
“5. On January 19, 2007, rather than accept [Rayco’s] offer of January 17, 2007, [Hardy] submitted a counter offer to [Rayco] in the form of the subcontract which included within its scope all procedures necessary to a complete installation of piping consistent with specification 15202.
“6. [Rayco’s] representatives understood the requirements of a complete 15202 installation, read the January 19, 2007[,] counterproposal and, the Court infers from these two facts proven in the record, understood the document as presented to them.
“7. On January 19, 2007, [Rayco] executed the said subcontract which included within its scope passivation to be performed by [Rayco], thus accepting Defendant Hardy’s counterproposal for a ‘turn key' installation.
“8. Five change orders were requested by [Rayco] and approved by [Hardy], thus increasing the amount of [Rayco’s] subcontract by the aggregate amount of the said change order as designated in the testimony and documents.
“9. [Rayco’s] change order request numbers 1, 3, 4, 5, 6, 9-16,17,18, 19, 22, and 23 were properly denied by [Hardy] as the work is either part of the original scope or, in the case of the requested overtime or pay for idle time, contemplated by the terms of the said subcontract between the parties.
“10. [Rayco’s] change order request numbers 2, 7, 8, 20, and 21 were performed by [Rayco] either at the request of [Hardy] or because of changes in the plans and drawings approved by [Hardy] which required [Rayco] to change the scope of its performance.
“11. Regarding the six (6) charge back items claimed by [Hardy] in its counterclaim, the Court finds that the amount expended by [Hardy] for passivation to be a proper charge back under the terms of the said subcontract as well as the installation of the [PSR] piping.
“12. The Court finds that the other [five (5) ] items sought as charge backs by [Hardy] in its counterclaim are to be disallowed due either to the work being outside of [Rayco’s] scope of work, or to [Hardy’s] having failed to comply with the subcontract requirement of providing [Rayco] with forty-eight hour written notification prior to having others perform the work set forth in the said other five claimed charge back items.”

The trial court relied on Cook’s Pest Control, Inc. v. Rebar, 852 So.2d 730 (Ala.2002), for its analysis of the basic contract principles of offer, acceptance, and counteroffer. The trial court concluded that the January 19, 2007, subcontract was Hardy’s counteroffer, which was accepted by Rayco. Accordingly, it enforced the terms of the subcontract and concluded that passivation and the installation of PSR piping was within the Rayco’s agreed-upon scope of work, applied the terms to each of the 23 change-order items in dispute, and used the following calculation to award Hardy damages in the amount of $108,498.78.

To determine the amount of the damages award, the trial court started with the fee agreed upon in the subcontract— $813,561. It added to that $200,123, the amount that represented the total cost of the change orders Hardy admitted were owed to Rayco ($813,561 + $200,123 = $1,013,684). It then added the amount of $83,040.68, which represented the total cost of the change orders the trial court determined that Hardy should have approved because the changes were not within the scope of Rayco’s work as defined by the subcontract ($1,013,684 + $83,040.68 = $1,096,724.68).

The trial court then subtracted the undisputed amount of $764,604.90, the progress payments that Hardy had paid to Rayco ($1,096,724.68 - $764,604.90 = $332,119.78), and it subtracted from that the amount of $210,941, which represented Hardy’s costs to provide passivation and to install PSR piping ($332,119.78 - $210,491 = $121,628.78), and the amount of $12,680, which represented Hardy’s extra administrative costs with regard to acquiring pas-sivation service ($121,628.78 — $12,680 = $108,498.78).

Finally, the trial court addressed the amount TFG owed Hardy pending the resolution of the action. The trial court determined the amount of $170,703.18 was recoverable upon resolution of this dispute and did not “charge it back against the contract balance due [Rayco].”

On December 23, 2009, Hardy moved to alter, amend, or vacate the judgment. Specifically, Hardy requested the trial court to reconsider its award to Rayco of $83,040.68 for change orders it concluded Hardy should have approved. Hardy further requested that the amended judgment should include an award of attorney fees, and, for the first time, Hardy submitted an affidavit addressing the reasonableness of the requested attorney fees. Finally, Hardy sought a clarification of the judgment to “eliminate any suggestion that Hardy was in breach of the subcontract” and to eliminate any requirement that it compensate Rayco before TFG remitted its final payment to Hardy, which Hardy referred to as the “pay-when-paid” provision of the subcontract.

On January 7, 2010, Rayco filed a post-judgment motion requesting that the trial court vacate its judgment regarding its determinations that the subcontract was a counteroffer, that “the contract” should be defined by the subcontract that included passivation and the installation of PSR piping, that Rayco was obligated to perform passivation and to install PRS piping, and that the damages award should be reduced by Hardy’s costs of performing passivation and installing PSR piping. Furthermore, Rayco requested that the trial court alter its judgment to conclude that Hardy had failed to meet its burden of proof regarding Hardy’s costs for passi-vation and for installing PSR piping and to increase the damages award by $210,941. On January 11, 2010, Rayco filed a supplement to its postjudgment motion, seeking an order vacating the finding that Hardy was entitled to be reimbursed for the administrative cost of $12,680, Hardy’s cost associated with its performance of the pas-sivation and the installation of PSR piping.

Rayco and Fidelity opposed Hardy’s postjudgment motion. Among other things, Rayco specifically contended that the trial court should deny Hardy’s request for reconsideration of an award of attorney fees because Hardy failed to provide expert testimony on the reasonableness of the requested attorney fees at trial and failed to produce in a timely manner documents reflecting the work performed by the attorney.

A hearing on the postjudgment motions was held on February 5, 2010. On March 2, 2010, the trial court denied the post-judgment motions, specifically stating that the issue of attorney fees was moot because no evidence regarding the propriety of the requested attorney fees had been presented at trial and Hardy’s posttrial affidavit was not properly before the court.

On March 22, 2010, Hardy filed a “motion for partial reconsideration” of the trial court’s denial of its postjudgment motion, which specifically addressed its request for an award of attorney fees. In the motion, Hardy asserted that its request had been “set forth in its counterclaim” and that, “[p]rior to the trial of the case, Hardy produced copies of bills reflecting legal expenses incurred by [Hardy], which were entered into evidence at trial.” Hardy further asserted that the trial court should reconsider its denial because Rayco’s motion to strike Hardy’s request for attorney fees was pending at the time of trial, and it was Hardy’s “understanding that all issues with respect to the award of [attorney fees], and any objections or defenses relating thereto, would be reserved for post-trial resolution.” Hardy admitted that it had filed its affidavit regarding attorney fees after the trial had concluded. Rayco moved to strike Hardy’s motion, asserting that the trial court no longer had jurisdiction over the matter and citing Ex parte Allstate Life Insurance Co., 741 So.2d 1066, 1071 (Ala.1999) (“[A]fter a trial court denies a Rule 59 post-judgment motion, the trial court no longer has jurisdiction over the case and the aggrieved party’s only remedy is to appeal.”). There is no indication in the record that the trial court ruled on Hardy’s motion.

On April 13, 2010, Hardy posted a su-persedeas bond and filed an appeal. On April 23, 2010, Rayco filed a cross-appeal pursuant to Rule 4(a)(2), Ala. RApp. P., which allows a party to an appeal to file a cross-appeal within 14 days of the first notice of appeal.

Hardy seeks this Court’s review as to three issues: Whether the trial erred 1) by adjusting the damages award based upon the “disputed change orders” (those the trial court determined Hardy should have approved), 2) by failing to address Hardy’s “requested” attorney fees, and 3) by failing to apply the pay-when-paid provision of the subcontract. In its cross-appeal, Ray-co seeks this Court’s review as to four issues: "Whether trial court erred by concluding 1) that the subcontract was the enforceable contract, 2) that the subcontract was a counteroffer, 3) that Hardy had presented sufficient evidence establishing the cost of performing passivation and installing the PSR piping, and 4) that Rayco’s damages should be offset by Hardy’s extra administrative expenses with regard to passivation and the installation of PSR piping.

Standard of Review

“Where evidence is presented to the trial court ore tenus, a presumption of correctness exists as to the court’s findings of fact; its factual determinations will not be disturbed unless clearly erroneous, without supporting evidence, manifestly unjust, or against the great weight of the evidence. Gaston v. Ames, 514 So.2d 877, 878 (Ala.1987); Cougar Mining Co. v. Mineral Land & Mining Consultants, Inc., 392 So.2d 1177 (Ala.1981).”

Valley Steel Constr., Inc. v. Addison Fabricators, Inc., 658 So.2d 352, 353 (Ala.1994).

Analysis

Initially, this Court must determine whether an enforceable contract existed between Hardy and Rayco, an issue raised in Rayco’s cross-appeal; therefore, we address the issues presented in Rayco’s cross-appeal first.

Appeal No. 1091011 — Rayco’s Cross-Appeal

I. Whether the Trial Court Erred by Concluding that the Subcontract was the Enforceable Contract

Rayco contends that the trial court erred in concluding that the subcontract was the enforceable contract because, it says, Rayco and Hardy had reached an agreement on the terms and scope of the work to be performed by Rayco, as evidenced by the two written proposals and the discussions occurring on or before January 2, 2007. Rayco reasons that the written subcontract submitted by Hardy on January 19, 2007, was to memorialize the terms of the existing contract.

“ ‘The requisite elements of [a contract] include: an offer and an acceptance, consideration, and mutual assent to terms essential to the formation of a contract.’ Strength v. Alabama Dep’t of Finance, Div. of Risk Mgmt., 622 So.2d 1288, 1289 (Ala.1993); Steiger v. Huntsville City Bd. of Ed., 653 So.2d 975, 978 (Ala.1995).”

Ex parte Grant, 711 So.2d 464, 465 (Ala.1997).

The trial court was presented with conflicting testimony as to when Hardy accepted Rayco’s offer and when the parties assented to the terms essential to the formation of the contract. Representatives of Rayco insisted that they consistently stated that Rayco would not provide passivation and installation of PSR piping. Representatives of Hardy stated that throughout the discussions of the contract Hardy insisted that it wanted an “all-inclusive” contract that included the performance of passivation and the installation of PSR piping. The trial court concluded that the subcontract executed on January 19, 2007, evidenced the formation of the agreement because it defined the terms of performance. Where, as here, the evidence regarding the formation of the contract is presented ore tenus, the findings of the trial court are entitled to a presumption of correctness. This Court will not reweigh the evidence, and Rayco has not established that the trial court’s conclusion that the subcontract of January 19, 2007, defined the obligations of the parties was clearly erroneous, without supporting evidence, manifestly unjust, or against the great weight of the evidence. See Valley Steel Constr., supra.

II. Whether the Trial Court Erred by Concluding that the Subcontract was a Counteroffer

Rayco contends that the trial court erred in concluding that the subcontract was a counteroffer because, it says, Rayco and Hardy had completed negotiation of the terms of the contract as of January 2, 2007, and a legally binding contract was formed at that time. The trial court, in reaching its conclusion that the January 19, 2007, subcontract constituted a counteroffer to which Rayco assented, applied the following reasoning from Cook’s Pest Control, Inc., 852 So.2d at 736-37:

“ ‘In the process of negotiation concerning a specific subject matter, there may be offers and counter-offers. One party proposes an agreement on stated terms; the other replies proposing an agreement on terms that are different. Such a counter-proposal is not identical with a rejection of the first offer, although it may have a similar legal operation in part. In order to deserve the name “counter-offer,” it must be so expressed as to be legally operative as an offer to the party making the prior proposal. It is not a counter-offer unless it is itself an offer, fully complying with all the requirements that have been previously discussed. This does not mean that all of its terms must be fully expressed in a single communication. Often they can be determined only by reference to many previous communications between the two parties. In this, a counter-offer differs in no respect from original offers. But there is no counter-offer, and no power of acceptance in the other party, unless there is a definite expression of willingness to contract on definitely ascertainable terms.
“ ‘If the party who made the prior offer properly expresses assent to the terms of the counter-offer, a contract is thereby made on those terms. The fact that the prior offer became inoperative is now immaterial and the terms of that offer are also immaterial except in so far as they are incorporated by reference in the counter-offer itself. Very frequently, they must be adverted to in order to determine what the counter-offer is. Often, the acceptance of a counter-offer is evidenced by the action of the offeree in proceeding with performance rather than by words.
“‘... If the original offeror proceeds with performance in consequence of the counter-offer, there can be no successful action for breach of the terms originally proposed.
“ ‘The terms “counter-offer” and “conditional acceptance” are really no more than different forms of describing the same thing. They are the same in legal operation. Whether the word “offer” is used or not, a communication that expresses an acceptance of a previous offer on certain conditions or with specified variations empowers the original offeror to consummate the contract by an expression of assent to the new conditions and variations. That is exactly what a counter-offer does. Both alike, called by either name, terminate the power of acceptance of the previous offer.’
“Joseph M. Perillo, Corbin on Contracts § 3.32 at 478-80; § 3.35 (rev. ed. 1993) (footnotes omitted).”

Our review of the record indicates that the trial court’s conclusion that the subcontract constituted a counteroffer that Rayco accepted is supported by the evidence and is not clearly erroneous or against the great weight of the evidence. The evidence indicates that Hardy did not accept the terms in Rayco’s offer but instead proposed terms for the contract that included the performance of passivation and the installation of PSR piping, as provided in specification 15202. See Hall v. Integon Life Ins. Co., 454 So.2d 1338 (Ala.1984) (noting that a response of a party that makes changes to the material terms of the offer is a counteroffer). Any conflicts in the testimony regarding the negotiations of the terms of the contract were for the trial court, not this Court, to resolve.

III. Whether the Trial Court Erred by Concluding that Hardy had Presented Evidence Indicating the Costs of Performing Passivation and Installing PSR Piping

Rayco contends that, even if this Court concludes that Rayco was obligated to perform the passivation and to install PSR piping as provided in specification 15202, the trial court erred in awarding Hardy the amount it incurred in performing the passivation and installing PSR piping. According to Rayco, the passivation and PSR piping specifications were “amended” or “changed,” and those changes increased the cost of passivation and installing PSR piping after the execution of the contract. Rayco reasons that it could be held liable only for the cost of performing passivation and installing PSR piping pursuant to the original specifications and that it should not be liable for any increased cost of performing passivation and installing PSR piping as a result of the amended specifications. Rayco’s argument, however, fails because the record does not establish that Rayco presented argument and evidence to the trial court with regard to the changes in the cost of performing passivation and installing PSR piping under the original specifications as compared to the cost of performing passi-vation and installing PSR piping under the amended changes. Because Rayco did not develop a record contesting Hardy’s evidence of cost, we cannot conclude that the trial court erred. See Wal-Mart Stores, Inc. v. Goodman, 789 So.2d 166, 176 (Ala. 2000)(“[W]e cannot assume error or presume the existence of facts as to which the record is silent.”).

IV. Whether the Trial Court Erred by Concluding that Rayco’s Damages Should be Offset by Hardy’s Extra Administrative Expenses

Rayco contends that the trial court erred in deducting from its damages award $12,680, which is the amount of the premium paid by Hardy to purchase a bond to “bond off’ Rayco’s lien. According to Rayco, because it was owed for its work on the project, Rayco had a valid lien on the project. The evidence indicated that Hardy was entitled to retain the balance owed Rayco pending resolution of the disputed issues and that Hardy had obtained a payment bond that afforded Rayco a complete remedy if the trial court found that the funds were owed Rayco.

During the questioning of Bradley Cor-dell, Hardy’s project manager, the following testimony was elicited:

“[Hardy’s counsel]: The bond premiums, Brad, what is that?
“[Cordell]: Rayco filed a lien on the building. And our contract with [TFG] require[d] us to bond off all liens, and so we bonded off [Rayco’s] lien. And those are the fees we incurred from our bonding company.
“[Hardy’s counsel]: And Rayco filed the lien even though Hardy Corporation had posted a payment bond from Travelers; correct?
“[Hardy’s counsel]: Yes.
“[Rayco’s counsel]: And you understand that if the Court awards any compensation to Rayco including its base contract, that that amount of money [the bond premium] — you would agree that amount of money is not due to be paid to you, wouldn’t you?
“[Cordell]: I mean, I’m not going to make a decision for the Court. My opinion is [Rayco] filed the lien unjustly. And we had to bond it off and that we should be compensated for that.”

A review of the record supports the trial court’s award of the premium cost to Hardy.

Appeal No. 1090988 — Hardy’s Appeal

I. Whether the Trial Erred by Adjusting the Damages Award Based upon the “Disputed Change Orders”

Hardy disputes the trial court’s damages award to Rayco on the change orders in the amount of $83,040.68. The terms of the subcontract required Rayco to submit “claims for extras” upon completion of extra work. Hardy denied several claims for “extras” because it determined that those extras were within the scope of Rayco’s work as defined by the subcontract. Rayco disagreed at the trial. The trial court reviewed all the claims for “extras” and, based upon disputed testimony and exhibits that were admitted into evidence, determined that some of the extras were properly denied and that some of them were not.

Hardy argues, as it did at trial and in its postjudgment motion, that the trial court erred in awarding these damages because, it says, Rayco’s claimed extra work was not a “change in scope,” Rayco did not, as the subcontract required, obtain written approval in advance from the project manager for the extra work, and Rayco waived its claims to additional compensation for the extra work in its “payment applications” or “lien wavers.”

First, Hardy asserts that no factual basis exists for the trial court’s determination that the work in the change orders constituted a change in the scope of the work to be performed by Rayco. Here, the trial court heard testimony and studied the exhibits regarding 23 change orders Hardy had denied. The trial court subtracted amounts due on only 5 of the 23 change orders, finding that “[Rayco’s] change order request numbers 2, 7, 8, 20, and 21 were performed by [Rayco] either at the request of [Hardy] or because of changes in the plans and drawings approved by [Hardy] which required [Rayco] to change the scope of its performance.”

“ ‘ “ ‘ “Appellate courts do not sit in judgment of disputed evidence that was presented ore tenus before the trial court....”’ Ex parte Roberts, 796 So.2d 349, 351 (Ala.2001) (quoting Ex parte Bryowsky, 676 So.2d 1322, 1324 (Ala.1996)). ‘When the evidence in a case is in conflict, the trier of fact has to resolve the conflicts in the testimony, and it is not within the province of the appellate court to reweigh the testimony and substitute its own judgment for that of the trier of fact.’ Delbridge v. Civil Serv. Bd. of Tuscaloosa, 481 So.2d 911, 913 (Ala.Civ.App.1985). ‘[A]n appellate court may not substitute its judgment for that of the trial court. To do so would be to reweigh the evidence, which Alabama law does not allow.’ Ex parte Foley, 864 So.2d 1094, 1099 (Ala.2003) (citations omitted).” ’
“Friedman v. Friedman, 971 So.2d 23, 28 (Ala.2007) (quoting Ex parte R.E.C., 899 So.2d 272, 279 (Ala.2004)).”

Curry v. Russell Cnty. Bd. of Educ., 125 So.3d 711, 717 (Ala.Civ.App.2013). The trial court resolved the conflicts in the testimony, and this Court will not substitute its judgment for the trial court’s on appeal.

Second, Hardy’s argument that Rayco failed to obtain written approval, in advance, of the changes is unpersuasive. Again, the trial court was presented with conflicting testimony with regard to the various changes made on the project and how or why those changes occurred. The trial court concluded that those particular changes were for changes in Rayco’s scope of work, i.e., the changes were either required by or requested by Hardy. The trial court properly resolved the conflicts, and this Court will not reweigh the evidence. Curry, supra.

Finally, Hardy contends that Rayco was not entitled to this damages award because, it says, Rayco waived any claim for payment for “extra work” in the three “pay applications” or “lien waivers,” which were admitted into evidence at the trial.

Each pay application submitted by Rayco contained the following lien-waiver language:

“To induce Hardy Corporation to pay the amount of this requisition, the undersigned hereby forever waives, relinquishes, releases, and discharges all liens and claims of liens that the undersigned has or shall have upon the property described in the subject subcontract and all improvements thereon, for all labor and/or materials furnished to said property through the last day of the current month, said waiver to be effective upon payment for the amount of the requisition. There are no additional costs or claims of any kind for any extras or additions of work, labor, material, or otherwise on the Project, except as stated above.”

(Emphasis added.)

In Southland Quality Homes, Inc. v. Williams, 781 So.2d 949 (Ala.2000), this Court recognized that when an instrument is unambiguous, its construction and legal effect will be based upon what is found within the four corners of the instrument.

Here, the lien-waiver language is unambiguous. Rayco’s pay applications that contained the lien-waiver language also included requests for payment for change-order request numbers 2, 7, 8, 20, and 21. The evidence indicates that Hardy refused to pay those change orders. The language in the pay application is unambiguous; Rayco’s promise to waive any liens was contingent on the payment of the underlying invoices. Therefore, even though Ray-co did execute the lien waivers, because Hardy did not pay Rayco for the underlying invoices, the trial court did not err in awarding Rayco payment from Hardy for change-order request numbers 2, 7, 8, 20, and 21.

II. Whether the Trial Erred by Failing to Address Hardy’s “Requested” Attorney Fees

“Whether to award or to deny attorney fees lies within the sound discretion of the trial court. On appeal, the trial court’s ruling on that question is subject to reversal only upon a showing of abuse of discretion. Advertiser Co. v. Auburn University, 579 So.2d 645 (Ala.Civ.App.1991).”

Battle v. City of Birmingham, 656 So.2d 344, 347 (Ala.1995).

On June 30, 2008, Hardy requested an award of attorney fees in its counterclaim. On November 20, 2009, Rayco and Fidelity moved to strike Hardy’s claim for attorney fees because, they said, Hardy had neither complied with their discovery requests for an affidavit addressing the reasonableness of the attorney fees nor produced the name of the expected trial witness regarding the reasonableness of the attorney fees. Hardy opposed the motion to strike; the trial court did not rule on the matter before trial. The only mention of the issue of attorney fees at trial was during Cordell’s testimony. The record provides:

“Q [Hardy’s attorney:] Has Hardy incurred legal expenses in the defense of this case?
“A [Cordell:] Yes.
“Q [Hardy’s attorney:] Are the invoices from our firm provided and attached as tab eleven?
“A [Cordell:] Yes.
“Q [Hardy’s attorney:] And are they summarized — “[Rayco’s attorney]: Sorry. Go ahead.
“Q [Hardy’s attorney:] — at the front of that section?
“A [Cordell:] Yes.
“[Rayco’s attorney]: Your Honor, we would object to the entry of any of this evidence on attorney fees. There is no expert testimony. These fees were only given to us when we got these books on Friday. And we move to strike any request for attorney fees at this time.
“[Hardy’s attorney]: We have a motion pending on that, Your Honor. It’s fíne if we defer that. I don’t know if [Rayco’s attorney] wants to get into that now, but I just want to— the bills are in evidence.
“THE COURT: All right.”

Hardy did not raise the issue again during the trial, and the trial court’s judgment did not address Hardy’s request for attorney fees. On March 2, 2010, the trial court denied Hardy’s postjudgment motion with a specific statement that the issue of attorney fees was moot because no evidence regarding the propriety of the requested attorney fees had been presented at the trial and that Hardy’s posttrial affidavit was not properly before the trial court.

Our review of the record indicates that the trial court exceeded the scope of its discretion in refusing to consider Hardy’s request for attorney fees. The record indicates that Hardy’s counsel stated that he would defer presentation of evidence with regard to attorney fees until after the trial court determined whether Rayco had breached the contract that provided for an award of attorney fees and that the trial court agreed. Although the communication between the trial court and counsel is not a model of clarity, a reasonable reading of the record establishes that the trial court agreed to provide Hardy an opportunity to present argument and evidence with regard to an award of attorney fees after a determination was made as to whether Rayco had breached the contract. Therefore, the trial court’s judgment in this regard is reversed.

III. Whether the Trial Court Erred by Failing to Apply the “Pay-when-Paid” Provision of the Subcontract

Hardy contends that the trial court erred in failing to order that Hardy was not required to pay Rayco the amounts due until Hardy had received final payment from TFG. The subcontract provided:

“Section 9.... Final payment shall be thirty (30) days after completion of the Project provided it shall not be due or owed from contractor or contractor’s surety unless and until, as conditions precedent (1) the Subcontractor has met the requirements and conditions of the Subcontract; (2) Contractor has received final payment for Subcontractor’s work from the general contractor, (3) Subcontractor has furnished a final lien waiver at release to contractor and owner, and (4) Subcontractor has properly furnished all project closeout documents to Contractor based upon the breach or impending breach of any provision by the Subcontractor or based upon the assertion of reasonable likelihood of assertion, of any lien, claim, garnishment, attachment, or other levy until such breach, controversy, lien, claim, or garnishment or other levy has been resolved.”

(Emphasis added.)

The evidence presented at trial established that the only amount TFG owed Hardy was $170,703. The testimony did not establish that this amount was for work performed by Rayco. Therefore, Hardy has not established that this condition of the subcontract is applicable or that the trial court erred in this regard.

Conclusion

Based on the foregoing, in Rayco’s cross-appeal (appeal no. 1091041), the judgment of the trial court for Hardy is affirmed; in Hardy’s appeal (appeal no. 1090988), the judgment of the trial court for Rayco is affirmed in part and reversed in part, and this case is remanded for proceedings consistent with this opinion.

1090988 — AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.

1091041 — AFFIRMED.

BOLIN, PARKER, SHAW, MAIN, WISE, and BRYAN, JJ„ concur.

MOORE, C.J., and MURDOCK, J., concur in the result.

      . These cases were inadvertently placed on this Court’s administrative docket in September 2011 and were not assigned to Justice Stuart until October 16, 2013. This Court regrets the delay in the issuance of the decisions in these appeals.

      . Passivation is a process by which the rate of corrosion of metal, such as stainless steel, is slowed by the application of a thin, transparent oxide film. PSR piping is used to inhibit the presence of bacteria in piping or tubing. As will be discussed infra, performing passi-vation and installing PSR piping on the project eventually required a $210,941 expenditure.

      . On May 9, 2008, upon the stipulated agreement of Rayco and Gambro, the Lee Circuit Court entered an order dismissing Gambro from the action.

      . The trial court’s order did not specifically address the claims against Fidelity, Rayco’s surety. However, because the trial court found that Rayco did not owe Hardy money, that is, that Rayco did not have any damages liability, the trial court implicitly found that Fidelity had no liability. Cf. Browder, Adm’r v. Faulkner, 82 Ala. 257, 260, 3 So. 30, 32 (1886) ("Without a judicial ascertainment of the default of the principal, no liability arises, and an action can not be maintained against the surety.”).

      . A "turn key” installation is an installation that is complete and ready to operate.

      . The trial court apparently correctly determined that it lacked jurisdiction to consider Hardy’s successive postjudgment motion because Hardy was not aggrieved in any of the ways contemplated by Ex parte Dowling, All So.2d 400, 404 (Ala. 1985). Simply, there was no new judgment and the issue of attorney fees not only could have been, but was, raised in Hardy's first postjudgment motion. Therefore, Hardy's proper avenue for relief was a timely appeal.

      . Our review of the record indicates that this case is clearly distinguishable from Buckmas-ters, Ltd. v. Action Archery, Inc., 915 F.Supp. 1188, 1195-96 (M.D.Ala. 1996). In Buckmas-ters, the testimony indicated that the representative of Auction Archery "lulled” Buck-masters into thinking that the submitted written contract for execution contained only one minor change; therefore, the court concluded that Buckmasters was not barred from rescinding the written contract because the written contract did not reflect the agreed-upon terms. Here, conflicting evidence was presented as to whether Hardy agreed at any stage in the discussions during the formation of the contract that Rayco would not be responsible for passivation and the installation of PSR piping. The trial court's resolution of this disputed issue is supported by reasonable inferences to be drawn from the ore tenus evidence. See Weeks v. Herlong, 951 So.2d 670, 679 (Ala. 2006) ("When the trial court receives evidence ore tenus and resolves a conflict of fact in favor of one party, this Court will not substitute its judgment for that of the trial court unless the trial court's decision is palpably erroneous or manifestly unjust. Phil-pot v. State, 843 So.2d 122, 125 (Ala.2002).”).