Guarantor Liability in Commercial Leases and Ore Tenus Presumption for Unrecorded Damages Hearings

Introduction

Island Girl Outfitters, LLC (“IGO”) leased retail space at Eastern Shore Centre from Allied Development of Alabama, LLC (“Allied”). IGO’s principal, Anthony S. Carver, personally guaranteed the lease. After IGO closed its store after one year of a five-year term, Allied sued for unpaid rent and related damages. The Baldwin Circuit Court granted summary judgment on liability and later entered a $94,350 judgment on damages. IGO and Carver appealed, challenging both the partial summary judgment and the damages award.

Key issues:

Whether Allied’s alleged failure to market and maintain the mall excused IGO’s rent obligations;
Whether Carver’s guaranty imposed personal liability;
Whether the summary-judgment record was sufficient;
Whether the absence of a damages-hearing transcript spoils the award.

Summary of the Judgment

The Supreme Court of Alabama, in an opinion by Justice Mitchell, affirmed both the liability finding and the damages award. On summary judgment, the court held:

IGO breached the lease by vacating the premises without contractual excuse;
Carver was bound by his guaranty;
IGA offered no lease provision obligating Allied to advertise or maintain the mall in any particular way;
Therefore, no genuine factual dispute barred summary judgment on liability.

On damages, applying the ore tenus presumption, the court affirmed the $94,350 judgment because no transcript or Rule 10(d) statement of the damages hearing was in the record, so the live-testimony findings must be presumed correct.

Analysis

Precedents Cited

Nationwide Prop. & Cas. Ins. Co. v. DPF Architects, P.C., 792 So. 2d 369 (Ala. 2000): Establishes de novo review for summary judgments.
Beauchamp v. Coastal Boat Storage, LLC, 4 So. 3d 443 (Ala. 2008): A plaintiff must show own performance under a bilateral contract.
Jefferson Cnty. Comm’n v. ECO Pres. Servs., L.L.C., 788 So. 2d 121 (Ala. 2000): Clarifies summary-judgment inferences for nonmovants.
Water Works & Sewer Bd. of Prichard v. Synovus Bank, ___ So. 3d ___ (Ala. 2024): Defines the ore tenus standard for oral evidence.
Cockrell v. Cockrell, 40 So. 3d 712 (Ala. Civ. App. 2009): Holds that absent a transcript or Rule 10(d) statement, live-testimony judgments are conclusively presumed correct.

Legal Reasoning

1. Liability by Summary Judgment: Allied’s motion, supported by the lease, guaranty, and an affidavit calculating rent due, established the breach as a matter of law. IGO’s contention—that Allied failed to market or maintain the property—did not implicate any explicit lease covenant. Under Beauchamp, to defeat summary judgment, a tenant must show a landlord’s failure to perform an express contractual duty. IGO pointed to no such duty, so no material factual dispute existed.

2. Guarantor Obligations: Carver executed a separate guaranty. Under well-settled contract and guaranty principles, once liability of the primary obligor is established, the guarantor’s liability follows.

3. Damages and Ore Tenus Presumption: At a post-summary judgment hearing, the trial court received live testimony on rent owed. The appellants failed to include a transcript or a Rule 10(d) statement of that hearing in the appellate record. Pursuant to Water Works and Cockrell, the appellate court must assume the evidence supported the award, and hence it affirmed the damages judgment.

Impact

This decision underscores two significant rules:

Summary judgment is appropriate in commercial-lease disputes when the tenant’s defense relies on uncontracted landlord duties.
Parties challenging damages awards after an ore tenus hearing must provide a record of the live testimony; absent that, the trial court’s findings stand.

Future litigants will know to:

Carefully plead and prove any landlord covenant they rely upon;
Ensure that any oral-evidence hearing is fully transcribed or memorialized in a Rule 10(d) statement.

Complex Concepts Simplified

Summary Judgment (De Novo Review): A judge decides—without a jury—if there is any real factual dispute. If there isn’t, the judge can decide the case on the papers.
Ore Tenus Evidence: Latin for “by mouth.” When a trial court bases its decision on live witness testimony, that factual finding is presumed correct on appeal unless a transcript shows it was wrong.
Rule 10(d) Statement (Ala. R. App. P.): If a transcript is unavailable, the parties can submit a written summary of what was said at the hearing. Without either, the appellate court assumes the trial court got it right.
Guarantor: A person who promises to pay if the primary debtor (the tenant) doesn’t. Once the tenant defaults, the guarantor stands in line behind the landlord’s straightforward claim for rent.

Conclusion

Island Girl Outfitters, LLC v. Allied Development of Alabama, LLC reaffirms that:

Absent an express lease covenant, a tenant cannot defeat a contract-breach claim by asserting uncontracted landlord obligations;
A personal guarantor is strictly bound once the tenant defaults;
Omissions in the appellate record—particularly missing transcripts of ore tenus proceedings—deprive the court of any basis to disturb a trial court’s damages findings.

This ruling will guide future commercial-lease litigation, sharpening the focus on contractual precision and thorough record-keeping when live testimony affects critical rulings.