Hembree Insurance Trust v. Maples Industries, Inc. (Appeal from Jackson Circuit Court: CV-24-900026).

Rel: April 11, 2025

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern
Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts,
300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other
errors, in order that corrections may be made before the opinion is printed in Southern Reporter.

SUPREME COURT OF ALABAMA
OCTOBER TERM, 2024-2025

_________________________

SC-2024-0543
_________________________

Hembree Insurance Trust

v.

Maples Industries, Inc.

Appeal from Jackson Circuit Court
(CV-24-900026)

STEWART, Chief Justice.
SC-2024-0543

Hembree Insurance Trust ("Hembree") appeals from a summary

judgment entered against it and in favor of Maples Industries, Inc.

("Maples"), by the Jackson Circuit Court ("the trial court"). We reverse

and remand.

Facts and Procedural History

In February 2019, Hembree and Maples entered into a lease

agreement ("the lease") by which Hembree leased a 135,847-square-foot

industrial building located in Scottsboro ("the property") to Maples. The

lease was for a term of five years, beginning on January 1, 2020, and

ending on December 31, 2024. The lease provided that Maples was

responsible for maintenance of the property and that "[Maples] will be

responsible for the replacement or repair of the roof. [Hembree] shall pay

50% of agreed upon roof replacement or agreed upon major repair costs."

At the time the lease was executed, Maples was already in possession of

the property, and counsel for Maples represented to the trial court that

Maples had initially leased the property from Hembree in 2011 and had

renewed that lease in 2014.

On March 3, 2024, Hembree initiated an action against Maples in

the trial court asserting a breach of the lease. Specifically, Hembree

2
SC-2024-0543

alleged that Maples had failed to repair or replace the property's roof as

required by the lease. On April 18, 2024, Maples moved pursuant to Rule

12(b)(6), Ala. R. Civ. P., to dismiss Hembree's action. In its motion,

Maples argued that Hembree did not actually own the property and that,

therefore, the lease was "void ab initio." In support of its motion, Maples

attached a 2014 warranty deed indicating that Hembree had transferred

its interest in the property to Woods Cove Industrial Property, LLC

("Woods Cove").

In its response to the motion to dismiss, Hembree argued that it

was the sole member of Woods Cove and that it had had the authority to

lease the property. Hembree attached the Woods Cove articles of

organization and operating agreement to its response. Those documents

indicated that Woods Cove had been organized in 2014 for the purpose of

acquiring property that it could, among other things, "lease." The Woods

Cove operating agreement and articles of organization identified

Hembree as the "Sole Member," and the operating agreement granted

Hembree the power to manage Woods Cove and the "right to act as an

agent of [Woods Cove]."

3
SC-2024-0543

On May 7, 2024, the trial court conducted a hearing on Maples's

motion and requested that the parties each submit proposed orders. 1 On

July 17, 2024, the trial court entered a judgment stating that it was

treating Maples's motion to dismiss as a motion for a summary judgment,

which it proceeded to grant. The trial court's judgment explained that,

because Woods Cove -- not Hembree -- owned the property, the lease was

"null and void in all respects." Hembree appeals.

Standard of Review

Because the trial court treated Maples's Rule 12(b)(6) motion to

dismiss as a motion for a summary judgment, we review its judgment

under the summary-judgment standard of review:

"This Court's review of a summary judgment is de novo.
Williams v. State Farm Mut. Auto. Ins. Co., 886 So. 2d 72, 74
(Ala. 2003). We apply the same standard of review as the trial
court applied. Specifically, we must determine whether the
movant has made a prima facie showing that no genuine issue
of material fact exists and that the movant is entitled to a
judgment as a matter of law. Rule 56(c), Ala. R. Civ. P.; Blue
Cross & Blue Shield of Alabama v. Hodurski, 899 So. 2d 949,
952-53 (Ala. 2004). In making such a determination, we must
review the evidence in the light most favorable to the
nonmovant. Wilson v. Brown, 496 So. 2d 756, 758 (Ala. 1986).
Once the movant makes a prima facie showing that there is

1Hembree's proposed order expounded on several legal theories to

which it had alluded in the hearing, including the argument that Maples
was estopped from denying its obligations under the lease.
4
SC-2024-0543

no genuine issue of material fact, the burden then shifts to the
nonmovant to produce 'substantial evidence' as to the
existence of a genuine issue of material fact. Bass v.
SouthTrust Bank of Baldwin County, 538 So. 2d 794, 797-98
(Ala. 1989); Ala. Code 1975, § 12-21-12."

Dow v. Alabama Democratic Party, 897 So. 2d 1035, 1038-39 (Ala. 2004).

Analysis

The trial court's judgment in this case declared the lease to be "null

and void in all respects" because, it concluded, the property was owned

by Woods Cove and not by Hembree, the named lessor. On appeal,

Hembree argues, among other things, that, as the sole member and

manager of Woods Cove, it had the authority to possess and lease the

property and that the trial court, therefore, erred as a matter of law in

holding that the lease was void.

It has been recognized that, generally, a party need not be the

owner of a property to lease it to another. "While the right to let property

is an incident of the title and possession, a lessor may validly lease

property to another, despite the fact that the title to the property is in a

third person, if the lessor lawfully possesses the property ...." 49 Am. Jur.

2d Landlord & Tenant § 3 (2018) (footnote omitted). Stated another way:

"The relation of landlord and tenant may be created
although the landlord is not the owner of the property.
5
SC-2024-0543

However, where the lessor has neither title nor possession,
the lease is of no effect. A licensor or lessor must possess some
right, title, or interest in the land, which enables them to lease
or license property to another person. Otherwise, any attempt
at leasing the property is void."

52 C.J.S. Landlord & Tenant § 503 (2024) (footnotes omitted). Moreover,

it has long been the rule in Alabama that a tenant in possession of a

leased property generally cannot dispute the landlord's title to that

property. See, e.g., § 35-9-1, Ala. Code 1975 ("The tenant cannot dispute

his landlord's title …."), and Ross v. Lewis, 44 So. 3d 1106, 1109 (Ala. Civ.

App. 2010). The reasons for that rule were explained in Davis v.

Williams, 130 Ala. 530, 30 So. 488 (1901):

" 'For reasons of public policy a tenant is never allowed to
dispute his landlord's title after having accepted possession
under him. This rule is elementary. The estoppel extends
equally to landlord and tenant; so that while the tenant is
estopped from denying the landlord's title, the landlord
cannot allege that he had no title at the time of the demise.
… The foundation of the estoppel is the fact of the one
obtaining possession and enjoying possession by the
permission of the other. And so long as one had this
enjoyment he is prevented by this rule of law from turning
round and saying his landlord has no right or title to keep him
in possession.' "

130 Ala. at 535, 30 So. at 490 (quoting 2 McAdam, Landlord & Tenant, p.

1341).

6
SC-2024-0543

In this case, the record reflects that Hembree was the sole and

controlling member of Woods Cove and had been granted the authority

by Woods Cove's governing documents to lease the property. It is

undisputed that Hembree placed Maples in possession of the property as

called for by the lease, that Maples paid rent to Hembree, and that

Maples had the benefit of its possession of the property. Under these

circumstances, Maples was effectually estopped under Alabama law from

challenging the lease on the basis that Hembree was the named lessor.

See Whaley v. Wynn, 208 Ala. 342, 343, 95 So. 16, 17 (1922) ("In this case

the lease was made in the name of the owner's agent …. By [the tenant's]

acceptance of such a lease and occupation of the premises thereunder, the

tenant is effectually estopped to deny the right of [that agent] to [bring

an unlawful-detainer action]."). Regardless, construing the limited

evidence submitted below in a light most favorable to the nonmovant

Hembree, we cannot say as a matter of law that, under the

circumstances, Hembree itself did not hold a sufficient interest in the

property to create a valid lease between it and Maples. Accordingly, we

7
SC-2024-0543

reverse the judgment of the trial court and remand the case for further

proceedings consistent with this opinion.2

REVERSED AND REMANDED.

Wise, Mitchell, and McCool, JJ., concur.

Sellers, J., concurs in the result.

2Maples also contends on appeal that there was no "meeting of the

minds" regarding ownership of the property. Maples's assent to the lease,
however, was evidenced by its signature on the lease. See Lilley v.
Gonzales, 417 So. 2d 161, 163 (Ala. 1982). Whether the lack-of-ownership
issue may support some other ground for avoidance of the lease (i.e.,
fraud, misrepresentation, mistake, etc.) is not before us, and we therefore
express no opinion on the matter.
8