Ex Parte Coleman
2003 WL 1145460, 861 So.2d 1080 (2003)
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Rule of Law:
A written agreement may be modified by a subsequent oral agreement, even if the written contract contains a provision requiring that all modifications be in writing.
Facts:
- Beginning in May 1999, Jesse and Vera Coleman pawned the title to their 1995 Cadillac to The Money Tree Outlet, Inc. through a series of written agreements.
- Each pawn ticket, a 30-day contract, contained a clause stating, 'Verbal agreements for additional days are not binding.'
- On November 4, 1999, Vera Coleman signed a new pawn ticket with a maturity date of December 5, 1999, and a 30-day grace period extending to January 4, 2000.
- On or before December 5, 1999, Vera Coleman telephoned Leigh Moore, an employee of The Money Tree, to explain she would be short on the renewal payment.
- During the call, Moore orally agreed to allow Coleman to make a double payment on or before January 4, 2000, to extend the pawn agreement.
- On January 3, 2000, Coleman called Moore again to confirm she had the money, and Moore told her to bring it in the next day.
- On January 4, 2000, The Money Tree repossessed the Colemans' car.
- Later that day, when Vera Coleman arrived at The Money Tree with payment, another employee, Jerry Higginbotham, refused to accept it, stating the car had already been repossessed.
Procedural Posture:
- Jesse and Vera Coleman sued The Money Tree and its employees in an Alabama trial court for conversion, breach of contract, and other claims.
- The defendants filed a motion for summary judgment, which the trial court granted.
- The Colemans filed a motion to alter, amend, or vacate the judgment, which was denied by operation of law.
- The Colemans, as appellants, appealed to the Alabama Court of Civil Appeals (an intermediate appellate court).
- The Court of Civil Appeals affirmed the trial court's judgment without an opinion.
- The Colemans, as petitioners, filed a petition for a writ of certiorari to the Supreme Court of Alabama, which the court granted.
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Issue:
Does a subsequent oral agreement between parties modify a written contract when that contract explicitly states that verbal agreements are not binding?
Opinions:
Majority - Johnstone, J.
Yes, a subsequent oral agreement can modify a written contract even if it contains a 'no oral modification' clause. Under Alabama law, a written agreement can be modified by a later oral agreement unless a specific statute prohibits it. The provision requiring modifications to be in writing is for the benefit of the party who included it, and that party can waive it through its actions or subsequent oral consent. Here, Vera Coleman provided substantial evidence of an oral agreement via her affidavit, which The Money Tree failed to rebut with any evidence of its own. Therefore, the repossession on January 4, the day payment was due under the new oral agreement, could constitute a breach of contract and a wrongful taking (conversion), making summary judgment for the defendants improper on those claims.
Concurring - Moore, C.J.
Yes, under these circumstances, the oral agreement can modify the written contract. The reversal of summary judgment is appropriate only because the defendants failed to present any evidence to support their claim that no oral modification occurred. Had the defendants provided evidentiary support, such as an affidavit denying the conversation, the summary judgment on the breach of contract and conversion claims could have been sustained.
Analysis:
This decision reinforces the legal principle that parties retain the freedom to contract and modify their own agreements, even overriding 'no oral modification' clauses they previously established. It clarifies that such clauses are not absolute and can be waived by subsequent oral agreements. The case serves as a critical reminder of the importance of the evidentiary burden in summary judgment proceedings; a party's failure to present evidence contradicting an opponent's sworn testimony can be fatal to its motion. For future litigation, this precedent means that a plaintiff's credible testimony about an oral modification can be sufficient to proceed to trial, even against explicit contractual language to the contrary.
