[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 07-11534 AUGUST 11, 2009
________________________ THOMAS K. KAHN
CLERK
D.C. Docket No. 05-01038 CV-F-N
MAC East, LLC,
a Limited Liability Company,
Plaintiff-Appellee,
versus
SHONEY’S,
a Limited Liability Company,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Alabama
________________________
(August 11, 2009)
Before BLACK, CARNES and COX, Circuit Judges.
PER CURIAM:
Our previous opinion in this case, MAC East, LLC v. Shoney’s, 535 F.3d 1293
(11th Cir. 2008), sets out the facts of this case. That opinion addressed and resolved
the issues on appeal relating to MAC East’s tortious interference claim. The issues
on appeal relating to MAC East’s breach of contract claim, however, which asserted
that Shoney’s breached its contract with MAC East by withholding consent to MAC
East’s proposed sublease, were left unresolved. Specifically, Shoney’s challenged in
its appeal the district court’s grant of partial summary judgment in favor of MAC East
on its breach of contract claim and the court’s denial of Shoney’s motion for summary
judgment on that claim. The propriety of the district court’s grant of partial summary
judgment to MAC East, and its denial of summary judgment to Shoney’s, presented
an issue of Alabama law that we considered unclear. Accordingly, we certified the
following question to the Alabama Supreme Court:
Under Alabama law, when an assignment contract gives
the assignor “sole discretion” to withhold consent to the
assignee’s proposed sublease, is the assignor’s exercise of
that discretion subject to a commercial reasonableness
standard, or any other standard?
535 F.3d at 1299. The Alabama Supreme Court answered the question in the
negative, holding that, when an assignment contract grants the assignor the “sole
discretion” to withhold consent to a proposed sublease, the exercise of that “sole
discretion” is not subject to a commercial reasonableness standard or any other
standard. Shoney’s LLC v. MAC East, LLC, __ So.3d __, 2009 WL 2343674, at *6
(Ala. 2009).
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Given the Alabama Supreme Court’s answer, the district court erred in
concluding that Shoney’s exercise of its “sole discretion” to withhold consent was
subject to a commercial reasonableness standard. In the contract assigning the lease
at issue, called the Assignment Agreement, the parties contracted for Shoney’s to
have “sole discretion” to withhold consent to a proposed sublease. Therefore,
Shoney’s did not, as a matter of law, breach the Assignment Agreement by
withholding its consent to a proposed sublease.
For these reasons, the district court erred in granting MAC East summary
judgment as to liability on the breach of contract claim and in denying Shoney’s
summary judgment on that claim.
In our prior opinion, we held that the district court erred in granting MAC East
partial summary judgment on the tortious interference claim and in denying Shoney’s
summary judgment on that claim, and reversed the district court’s order granting
partial summary judgment to MAC East on that claim. MAC East, 535 F.3d at 1298.
Because we now conclude that the district court also erred in granting MAC East
partial summary judgment on the breach of contract claim and in denying Shoney’s
summary judgment on that claim, we also reverse the district court’s order granting
partial summary judgment to MAC East on its breach of contract claim and direct the
district court to enter summary judgment in favor of Shoney’s on that claim. Because
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no portion of the judgment in favor of MAC East still stands, we need not address
whether any attorney’s fees awarded as part of that judgment were appropriate.
REVERSED AND REMANDED WITH INSTRUCTIONS.
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