CBS Holdings, LLC v. Hexagon US Federal, Inc. (Appeal from Madison Circuit Court: CV-21-900504).

Rel: October 18, 2024

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-2024-0077
_________________________

CBS Holdings, LLC

v.

Hexagon US Federal, Inc.

Appeal from Madison Circuit Court
(CV-21-900504)

COOK, Justice.

This appeal concerns a dispute over the interpretation of a

commercial lease. The plaintiff below, Hexagon US Federal, Inc.
SC-2024-0077

("HexFed"), leased a portion of a building. Later, the lessor of the

building sold it to CBS Holdings, LLC. Thus, CBS Holdings became the

lessor. A dispute later arose between the parties concerning the length

of the lease and whether HexFed had validly renewed the lease for an

additional term.

That dispute resulted in HexFed's filing suit against CBS Holdings,

alleging that CBS Holdings had breached the parties' lease agreement by

threatening to eject HexFed from the leased premises after it had

renewed the lease. In response, CBS Holdings alleged various

counterclaims against HexFed, asserting that the lease had terminated

and that HexFed had not validly exercised its renewal option. Following

a bench trial, the Madison Circuit Court entered a judgment in favor of

HexFed on all claims. CBS Holdings appeals that judgment. For the

reasons stated below, we affirm the trial court's judgment in favor of

HexFed.

Facts and Procedural History

I. The 2015 Lease

In 2015, Intergraph Unimproved Properties, LLC ("Intergraph

Unimproved"), and HexFed, formerly known as Intergraph Government

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Solutions Corporation, entered into a commercial lease agreement ("the

2015 lease") for two "bay areas" -- Bay 202 and Bay 301 -- in a building

located on Dunlop Boulevard in Huntsville. 1 That lease provided a five-

year term for Bay 202 and a one-year term for Bay 301 and also

stipulated the monthly rent for each term. The 2015 lease further

provided separate renewal options for each bay -- specifically, two five-

year renewal options for Bay 202 and four one-year renewal options for

Bay 301.

II. The 2016 Lease

In 2016, Intergraph Unimproved and HexFed executed an

"AMENDED AND RESTATED LEASE AGREEMENT" ("the 2016

lease") in which the companies, among other things, "agree[d] to amend

the description of premises and base lease term" in the 2015 lease.

The 2016 lease provided a five-year base lease term for both Bay

202 and Bay 301 and included a single renewal provision for both bays.

However, it specified the rental rate for Bay 301 only for 12 months and

indicated the maximum rental amount for that bay only for a 12-month

1Intergraph Unimproved and HexFed were related entities at the

time they executed the 2015 lease.
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term.

The 2016 lease also provided that, in the event of a breach, "[a]ll

costs incurred by either party … to enforce any provision of this [l]ease,

including[,] by way of example, reasonable attorneys' fees from the date

any such matter is turned over to an attorney, shall also be recoverable

from the other party." (Emphasis added.) It further permitted Intergraph

Unimproved, or its assignee, to "accept from [HexFed] any payment or

payments" if HexFed breached the lease without "waiving [its] right to

exercise any right or remedy provided for by reason of any other existing

or future breach." Finally, the 2016 lease required that "[a]ll notices by

either party to the other shall be made by depositing such notice with a

nationally recognized overnight commercial carrier service … and such

notice shall be deemed to have been served on the date of its delivery by

such carrier unless otherwise provided." (Emphasis added.)

The 2016 lease was negotiated and signed by Edgar Porter, a

representative of Intergraph Unimproved, and Michael Barnett, a

representative of HexFed. Although Porter did not recall the specific

discussions pertaining to the different lease terms, he stated that he was

unaware of any errors or misstatements in the 2016 lease.

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Barnett assigned the task of reviewing the 2016 lease to Patricia

Bahr, HexFed's Director of Contracts and Procurement at that time.

Bahr explained that, although she did not recall having "any specific

involvement" with the negotiations for the 2016 lease, Intergraph

Unimproved and HexFed executed the 2016 lease, in part, to "put the

[bays] on the same lease term." Bahr stated that HexFed "did not notice"

that the 2016 lease provided the maximum rent for Bay 301 only for 12

months. She also stated that HexFed intended to pay the listed amount

beyond the 12-month period.

III. CBS Holdings Buys the Building Located on Dunlop Boulevard

On November 14, 2016, CBS Holdings purchased the building from

Intergraph Unimproved, and the 2016 lease was thus assigned to CBS

Holdings. At that time, HexFed began making its monthly rental

payments for Bay 202 and Bay 301 to CBS Holdings.

More than two years later, on July 17, 2019, Randy Piechocki, one

of the owners of CBS Holdings, emailed Bahr, stating, for the first time,

that Bay 301 "had an initial term of 12 months, subject to a 90[-]day

renewal notice." He continued, "CBS has[ not] received notice and as such

the space is currently deemed to be on a month-to-month basis. Kindly

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advise of [HexFed's] intention regarding this space." A few days later,

HexFed's legal counsel at that time responded to the email, disputing

Piechocki's characterization of the lease term: "The base lease term

covering [Bays 202 and 301] is 5 years. … There are two 5-year renewal

options that require 90 days advance written notice, but that notice is not

yet due. … Therefore, no part of the leased space is rented on a month-

to-month basis." Following additional correspondence, Piechocki

eventually proposed an increased rental price for Bay 301, which HexFed

rejected. Piechocki then sent HexFed a notice to vacate the premises.

It is undisputed, however, that HexFed did not vacate the premises,

nor did it pay the increased rent. In fact, HexFed continued to occupy the

leased premises at the rate provided in the 2016 lease. CBS Holdings did

not take any action to eject HexFed. The parties operated in this manner

for more than a year.

IV. The Parties' "First Amendment" to the 2016 Lease

On September 14, 2020, CBS Holdings and HexFed executed a

"First Amendment" to the 2016 lease. In that amendment, the parties

changed the identification of the lessee from Intergraph Government

Solutions Corporation -- HexFed's former legal name used in the 2016

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lease -- to Hexagon US Federal, Inc. -- HexFed's current legal name. They

also increased the monthly rent for Bay 202 in exchange for the

installation of certain receptacle outlets. The amendment to the 2016

lease concluded by stating: "All other terms and conditions remain the

same."

Piechocki acknowledged that he had drafted that lease amendment

with full knowledge that the parties disputed the lease terms provided in

the 2016 lease. Nevertheless, the issues pertaining to the lease term were

not discussed during the negotiations for the lease amendment. This

apparently led Bahr to believe that those issues were resolved.

V. HexFed's Renewal of the Newly Amended 2016 Lease

On December 16, 2020, Bahr emailed Piechocki with a notice of

HexFed's intent to renew the newly amended 2016 lease. After receiving

no response, Bahr sent an additional email as well as a written notice via

overnight commercial carrier, which CBS Holdings received on December

31, 2020. The written notice stated, in relevant part:

"In accordance with the terms and conditions of the referenced
lease agreement, … and the associated assignment letter,
[HexFed] hereby provides timely notice to CBS Holdings, LLC
of [its] intent to exercise [its] first five-year renewal option for
the leased premises. [HexFed] acknowledges and confirms
that this will result in a two percent (2%) increase in the rent
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effective 1 April 2021 with a resulting 2% annual increase
thereafter."

(Emphasis added.) HexFed's notice also included a schedule of the

monthly rent that would be paid pursuant to the renewal, which provided

incorrect amounts that were lower than the 2% increase provided in the

2016 lease. However, the notice also stated: "If your calculation differs

due to rounding or other reasons, please let us know." Bahr acknowledged

that, although she was unaware when she sent the notice, she had "made

an error" when calculating the monthly rental amounts. 2

That same day, CBS Holdings responded to HexFed, rejecting the

renewal notice "by reason of incorrectly stating renewal rents, as well as

other reasons." Therefore, CBS Holdings believed that HexFed's tenancy

for Bay 301 ended on March 31, 2021.

On January 28, 2021, HexFed's new legal counsel, Matthew Moore,

sent a letter to Piechocki. Moore argued that HexFed had exercised its

renewal option. Moore "acknowledge[d] that both Intergraph

[Unimproved] and HexFed mistakenly failed to align" the base lease term

2Although it is undisputed that the notice provided an incorrect
calculation of the increased rent, HexFed has paid, at all times relevant
to this appeal, the correct rental amount to CBS Holdings.
8
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for Bay 301 -- which was amended to 5 years -- and the maximum-rent

term -- which specified rent only for 12 months. However, Moore argued

that, "[t]o the extent the mistake in aligning the 'Maximum Rent'

provisions of the [2016] Lease (vs. the [2015] Lease) creates any

ambiguity in the plain language of the Lease, it is beyond clear this was

a mutual mistake by the original parties to [the] Lease."

Moore also acknowledged that HexFed had miscalculated the rent

in the renewal notice and thus provided a corrected schedule of the

monthly rental payments in accordance with the 2% increase. Finally,

Moore explained that HexFed intended to continue occupying Bays 202

and 301 according to the terms of the renewal provisions in the 2016

lease.

In his response, Piechocki explained his position that "the

attempted renewal notice was tantamount to an offer for a new lease on

cheaper terms which is not provided in the original leasing agreement."

Piechocki offered Bays 202 and 301 at a new rental rate -- which was

approximately $8,000 more than the original rate with the 2% increase.

VI. The Present Action

On April 21, 2021, HexFed filed a complaint in the Madison Circuit

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Court, seeking a judgment declaring that HexFed had validly exercised

its option to renew the 2016 lease and that the rental rate for Bays 202

and 301 was, therefore, the amount from the 2016 lease with a 2%

increase. HexFed also claimed that CBS Holdings had breached the 2016

lease by, among other things, breaching the covenant of quiet enjoyment

contained in the 2016 lease. Finally, HexFed asked the trial court to

reform the 2016 lease to correct any "scrivener's errors" left from the 2015

lease when the parties executed the 2016 lease and to award it costs and

attorneys' fees pursuant to the 2016 lease. 3

CBS Holdings answered and filed counterclaims against HexFed,

asserting breach-of-contract, ejectment, and unjust-enrichment claims

and seeking imposition of a landlord's lien pursuant to § 35-9-60 et seq.,

Ala. Code 1975. CBS Holdings alleged that HexFed had breached the

2016 lease by, among other things, "fail[ing] to pay the rent due under

the [2016] [l]ease." Further, CBS Holdings alleged that HexFed's tenancy

for Bay 301 had expired after 12 months under the 2016 lease and that,

in the alternative, HexFed's tenancy for the entire premises had expired

3HexFed later amended its complaint to add a claim for a judgment

declaring that it was not responsible for certain repairs on the leased
premises.
10
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on March 31, 2021, due to its failure to properly renew the lease. CBS

Holdings sought damages and a landlord's lien for HexFed's use of the

premises after the conclusion of the tenancy.

Following additional filings and proceedings, both HexFed and CBS

Holdings filed motions for a summary judgment. After conducting a

hearing on both motions, the trial court denied them.

On December 18, 2023, the trial court held a bench trial. Following

that bench trial, the trial court entered a judgment in favor of HexFed on

its claims against CBS Holdings. It also entered a judgment in favor of

HexFed on CBS Holdings' counterclaims.

In support of its judgment, the trial court found that CBS Holdings

had waived any right to argue that the 2016 lease had ended after 12

months based on the fact that CBS Holdings had accepted rent from

HexFed for Bay 301 "between April 1, 2017 (CBS Holdings' … purported

expiration date for Bay 301) and July 17, 2019," without objection. The

trial court also found that, after disputing the lease term for Bay 301,

CBS Holdings had executed the "First Amendment" to the 2016 lease

without changing the lease term and had affirmed that "[a]ll other terms

and conditions [of the lease] remain[ed] the same."

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In addition to making the above findings, the trial court reformed

the 2016 lease pursuant to § 8-1-2, Ala. Code 1975, establishing that "the

maximum monthly rent defined in the [l]ease for Bay 301 did not expire

after 1 year," and declared that "HexFed properly exercised its 5-year

renewal term and is entitled to occupy the property through at least

March 31, 2026." Finally, the trial court awarded costs and attorneys'

fees incurred by HexFed in an amount to be determined in the future. 4

CBS Holdings appeals.

Standard of Review

"When a trial court hears ore tenus testimony, ' " its
findings on disputed facts are presumed correct and its
judgment based on those findings will not be reversed unless
the judgment is palpably erroneous or manifestly unjust." '
Fadalla v. Fadalla, 929 So. 2d 429, 433 (Ala. 2005) (citation
omitted). But ' " the ore tenus rule does not extend to cloak
with a presumption of correctness a trial judge's conclusions
of law or the incorrect application of law to the facts." ' Id.

4The trial court's failure to assess reasonable attorneys' fees at the

time of the bench trial does not affect the finality of the trial court's
judgment for purposes of the present appeal. Bento v. Bento, [Ms. SC-
2023-0365, Mar. 22, 2024] ___ So. 3d ___, ___ n.6 (Ala. 2024) ("[A] trial
court's failure to assess attorney's fees generally does not render a
judgment nonfinal.").

The trial court later received evidence on HexFed's reasonable
attorneys' fees and entered a judgment on the amount of those fees. That
judgment has been appealed to this Court. This Court has issued a stay
of that appeal pending the resolution of the present appeal.
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(citation omitted). Further, '[i]f a contract can be interpreted
without going beyond the four corners of the document, the
trial court's resolution of the question of law is accorded no
presumption of correctness, and this Court's review is de
novo.' Exxon Mobil Corp. v. Alabama Dep't of Conservation &
Nat. Res., 986 So. 2d 1093, 1101 (Ala. 2007)."

Lafayette Land Acquisitions II, LLC v. Walls, 385 So. 3d. 519, 522 (Ala.

2023).

Discussion

CBS Holdings appeals the trial court's (1) determination that it

waived its ability to argue that the 2016 lease provided a 12-month base

lease term for Bay 301, (2) reformation of the 2016 lease on the ground of

mutual mistake, (3) determination that HexFed properly exercised its

right to renew the 2016 lease, and (4) award of costs and attorneys' fees

to HexFed. We will address each argument in turn.

I. Waiver

First, CBS Holdings contends that the trial court erred in finding

that it had waived its right to argue that HexFed leased Bay 301 for a

12-month term. According to CBS Holdings, its execution of the "First

Amendment" to the 2016 lease could not constitute a waiver because the

amendment "reflects an intent that nothing other than what was

expressly addressed in the First Amendment was to change," including
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the 12-month maximum-rent provision. CBS Holdings' brief at 33. In

response, HexFed argues that "CBS Holdings itself drafted and executed

a lease amendment" without amending the base lease term and that

"HexFed interpreted th[at] lease amendment as CBS Holdings'

relinquishment of its arguments from the 2019 eviction attempt."

HexFed's brief at 25.

A waiver is a " ' voluntary and intentional surrender or

relinquishment of a known right.' " Bentley Sys., Inc. v. Intergraph Corp.,

922 So. 2d 61, 93 (Ala. 2005) (quoting Dominex, Inc. v. Key, 456 So. 2d

1074, 1058 (Ala. 1984)). The determination of whether a party has waived

an issue is a question of fact. Horne v. TGM Assocs., L.P., 56 So. 3d 615,

624 (Ala. 2010).

Here, CBS Holdings contends that the 2016 lease term for Bay 301

ended on March 31, 2017 -- 12 months after the lease commenced on April

1, 2016. Despite that contention, however, the record shows that CBS

Holdings drafted and executed the "First Amendment" to the 2016 lease

-- after HexFed disputed CBS Holdings' interpretation of the lease and

asserted its position that it had a five-year term for Bay 301 -- without

attempting to change the base lease term set forth in that lease. CBS

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Holdings then continued to accept HexFed's payments for its possession

of Bay 301 for years, without further objection. Signing an amendment

to a lease that one contends has ended and then continuing to accept

payments under that lease is evidence of a " ' voluntary and intentional

surrender or relinquishment of a known right.' " Bentley Sys., 922 So. 2d

at 93 (quoting Dominex, Inc., 456 So. 2d at 1058). Thus, CBS Holdings'

argument here is illogical.

Taken together, these circumstances support the trial court's

finding that that CBS Holdings waived its ability to argue that HexFed

had a 12-month base lease term for Bay 301. We therefore conclude that

the trial court's determination on this issue was not " ' " palpably

erroneous or manifestly unjust." ' " Lafayette Land Acquisitions, 385 So.

3d at 522 (citations omitted). See also Lott, 501 So. 2d at 1198-99.

II. The Trial Court's Reformation of the 2016 Lease Pursuant to §
8-1-2, Ala. Code 1975

Next, CBS Holdings argues that the trial court erred by reforming

the 2016 lease under § 8-1-2, Ala. Code 1975, so that "the maximum

monthly rent defined in the [l]ease for Bay 301 applied to all 5 years of

the first 5-year rental term." According to CBS Holdings, that

reformation was improper because (1) Bahr's testimony relating to
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HexFed's intent when executing the 2016 lease was insufficient to justify

reformation and (2) "HexFed called no witnesses from the other original

party to the [2016] [l]ease to establish a mutual mistake, or other

circumstance from th[e] statute, applied." CBS Holdings' brief at 34. In

response, HexFed argues that there was testimony demonstrating that

Intergraph Unimproved "intended to accept the defined … monthly rent

for the full five-year term," which supports the trial court's reformation.

HexFed's brief at 23.

Generally, a written contract is enforced by the plain meaning of its

terms as they are expressed within the four corners of the document.

Southland Quality Homes, Inc. v. Williams, 781 So. 2d 949, 953 (Ala.

2000). However, under § 8-1-2, a trial court has the authority to reform a

written contract when certain circumstances exist:

"When, through … a mutual mistake of the parties or a
mistake of one party which the other at the time knew or
suspected, a written contract does not truly express the
intention of the parties, it may be revised by a court on the
application of the party aggrieved so as to express that
intention, so far as it can be done without prejudice to the
rights acquired by third persons in good faith and for value."5

5Notably, § 8-1-2 limits a trial court's authority to reform a written

contract when it may "prejudice … the rights acquired by third persons
in good faith and for value." However, CBS Holdings does not argue that
this limitation applies here. We therefore see no reason to address it.
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A mutual mistake occurs "when the parties have entered into an

agreement, but the [contract] does not express what the parties intended

under the agreement." Fadalla v. Fadalla, 929 So. 2d 429, 434 (Ala. 2005).

To reform a contract under § 8-1-2, "Alabama caselaw requires

evidence of the intent of all parties to the instrument." Fadalla, 929 So.

2d at 435. See also Palmer v. Palmer, 390 So. 2d 1050, 1053 (Ala. 1980)

("Where it appears that by a mutual mistake of all parties the instrument

does not conform to or express their intention …, relief may be had in

equity against the other party to the conveyance …."). The trial court may

consider parol evidence in determining the parties' intent. Brown v.

Butts, 214 So. 3d 1181, 1190 (Ala. Civ. App. 2016).

Because HexFed sought the reformation of the 2016 lease in its

complaint, it had the burden to "produce clear, convincing, and

satisfactory evidence of what the parties actually intended the writing to

express." Fadalla, 929 So. 2d at 435. Notably, the 2016 lease itself

acknowledges that, by executing the document, HexFed and Intergraph

Unimproved intended to change the term of the 2015 lease. Specifically,

the 2016 lease stated: "Landlord and Tenant agree to amend the … base

lease term; therefore, this Lease supersedes the [2015] Lease

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Agreement." In fact, the 2016 lease actually amended the base lease term

from the 2015 lease and combined the renewal options for both bays:

2015 Lease 2016 Lease

"Base Lease Term for "Base Lease Term for
premises noted in premises noted in
[Bays 202 and 301] [Bays 202 and 301]
shall be for a period of shall be for a period of
5 years and 1 year 5 years starting on the
respectively starting on Commencement Date.
the Commencement
Date. "….

"….
"Tenant shall have two
"[Bay 202] Renewal (2) five (5) year renewal
Options: Tenant shall options for the
have two (2) five (5) Premises exercisable
year renewal options by giving 90 days
exercisable by giving advance written notice
90 days advance to the Landlord…."
written notice to the
Landlord.…

"[Bay 301] Renewal
Options: Tenant shall
have four (4) one (1)
year renewal options
exercisable by giving
ninety (90) days
advance written notice
to the Landlord…."

Thus, the 2016 lease itself constitutes evidence of the parties' intent to

amend the lease term for Bay 301 to a five-year period and supports the
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trial court's finding of a mutual mistake.

CBS Holdings argues that the trial court's determination of

HexFed's intent was incorrect because, although Bahr testified that

HexFed intended to pay the defined maximum rent beyond 12 months,

she also stated that she did not "recall any specific involvement" in the

negotiation process for the 2016 lease. CBS Holdings' brief at 35.

However, Bahr stated during the bench trial that, at the time HexFed

and Intergraph Unimproved entered into the 2016 lease, she was

responsible for "any review or implementation at HexFed that needed to

happen under [the 2016] [l]ease," and Barnett testified that Bahr had

been assigned the task of reviewing the lease on HexFed's behalf.

Further, Bahr based her testimony on the written terms of the 2016

lease, which, as explained above, support the conclusion that HexFed

intended to lease Bay 301 for five years.

CBS Holdings also contends that the trial court's determination of

Intergraph Unimproved's intent is incorrect because Porter -- the

representative for Intergraph Unimproved -- testified that he was

unaware of any errors or mistakes in the 2016 lease, which, CBS

Holdings asserts, indicates that Intergraph Unimproved expected to

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receive the rent provided in that lease only for 12 months. However, as

HexFed notes, Piechocki testified that CBS Holdings received the

projected cash flows from Intergraph Unimproved when it acquired the

2016 lease, and those cash flows indicated that Intergraph Unimproved

expected to receive the maximum rent, as defined in the 2016 lease, for

the full five-year term. Therefore, the trial court's determination that

Intergraph Unimproved intended for the 2016 lease term to continue past

12 months was not " ' " palpably erroneous or manifestly unjust." ' "

Lafayette Land Acquisitions, 385 So. 3d at 522 (citations omitted).6

III. Renewal of the 2016 Lease

CBS Holdings also challenges the trial court's finding that HexFed

properly renewed the 2016 lease. According to CBS Holdings, HexFed's

renewal notice did not constitute a valid acceptance of its renewal offer

because it "set forth the proposed rent schedule that was lower than the

6CBS Holdings also argues that "[t]he Lease contained no agreed-

upon rent after March 2017." CBS Holdings' brief at 35. Therefore, it
argues, "[r]ent is a material term of a lease and without an agreement
upon rent, a lease is too uncertain or indefinite to be enforceable." Id.
(citing Muscle Shoals Aviation, Inc. v. Muscle Shoals Airport Auth., 508
So. 2d 225, 227 (Ala. 1987)). However, because CBS Holdings waived any
right to argue that the 2016 lease ended after 12 months and the trial
court validly reformed the lease to state a 5-year term, we need not
consider this argument.
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required rent." CBS Holdings' brief at 26. CBS Holdings argues that the

incorrect rent schedule turned HexFed's "acceptance" into a

"counteroffer," which CBS Holdings rejected. Id. at 23-27. In response,

HexFed argues that its mistaken rent calculations could not invalidate

its renewal because "the lease did not require HexFed to accurately recite

its rent payments moving forward in order to effectively renew for a

second term." HexFed's brief at 17.

" ' It is well settled that lease agreements are contracts and that the

general principles of contract construction apply in ascertaining the scope

and meaning of a lease agreement.' " Horne, 56 So. 3d at 622 (quoting

Bowdoin Square, L.L.C. v. Winn-Dixie Montgomery, Inc., 873 So. 2d

1091, 1098 (Ala. 2003)). "A contract ' " ' must be given effect, if at all,

according to its plain and inescapable meaning.' " ' " Id. (quoting James A.

Head & Co. v. Rolling, 265 Ala. 328, 338, 90 So. 2d 828, 836 (1956)).

Under the terms of the 2016 lease, HexFed had two options to

renew the lease with CBS Holdings for additional five-year terms. "An

'option' is 'a promise that meets the requirements for the formation of a

contract ….' " Ponder v. Lincoln Nat'l Sales Corp., 612 So. 2d 1169, 1171

(Ala. 1992) (quoting Restatement (Second) of Contracts § 25 (Am. Law

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Inst. 1981)). "An 'option' to renew a lease on specific terms is a

contractual right for the benefit of the holder of the option[,] and it binds

the lessor who granted the option." Id.

HexFed argues that "[a]ll the [2016] lease required was '90 days

advance written notice' " to exercise its right to renew. HexFed's brief at

17 (emphasis omitted). Viewing the plain language of the 2016 lease, this

interpretation is correct: "Tenant shall have two (2) five (5) year renewal

options for the Premises exercisable by giving 90 days advance written

notice to the Landlord." (Emphasis added.) Here, HexFed delivered its

written notice via commercial carrier to CBS Holdings on December 31,

2020, which undisputedly met the 90-day notice requirement.7 Moreover,

the notice specifically stated: "[HexFed] hereby provides timely notice to

CBS Holdings, LLC of our intent to exercise our first five-year renewal

option for the leased premises." Thus, under the terms of the lease,

HexFed exercised its right to renew the lease, and CBS Holdings is

7Although HexFed emailed CBS Holdings its intent to renew the

lease on December 16, 2020, and December 29, 2020, those emails were
ineffective notice under the terms of the 2016 lease, which requires that
"[a]ll notices by either party to the other shall be made by depositing such
notice with a nationally recognized overnight commercial courier
service."

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therefore bound by that renewal. See Ponder, 612 So. 2d at 1171; City

Garage & Sales Co. v. Ballenger, 214 Ala. 516, 518, 108 So. 257, 259

(1926) ("The tender by the lessee of a renewal … conforming to the terms

of the option[] … was an exercise of the option, entitling him to specific

performance in equity upon refusal of the lessor to execute the renewal

lease.").

HexFed's improper calculation of the rent did not void its renewal.

The 2016 lease stipulated a 2% increase in the base rent, but that 2%

increase applies only "[i]f [HexFed] exercise[d] its option to renew the

Lease for a renewal term." By its terms, that provision does not impose

an additional requirement with respect to the renewal notice; rather, it

enables the parties to enforce the 2% increase if the lease has been

renewed. 8

8At trial, Piechocki explained that he believed that CBS Holdings

would have been "locked in" to the incorrect amounts set forth in the
schedule provided by Bahr if he had accepted the renewal notice.
However, we note that HexFed was also bound by the renewal option.
See Jenkins v. Thrift, 469 So. 2d 1278, 1279 (Ala. 1985) (" ' [W]hen [an]
option is exercised in accordance with its terms mutuality of obligation is
created and the option becomes a binding contract ….' " (quoting Kennedy
v. Herring, 270 Ala. 73, 75, 116 So. 2d 596, 598 (1959))). Thus, if HexFed
had attempted to pay less than the 2% increase provided in the lease,
CBS Holdings could have enforced the renewal option and demanded the
correct payments.
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Because HexFed sent written notice of its intent to renew the 2016

lease via a commercial carrier in accordance with the 90-day notice

requirement, the trial court did not err in finding that HexFed had

exercised its renewal option. Therefore, the trial court's judgment in

favor of HexFed on its claims and on CBS Holdings' counterclaims was

not " ' " palpably wrong or manifestly unjust." ' " Lafayette Land

Acquisitions, 385 So. 3d at 522 (citations omitted).

IV. Costs and Attorneys' Fees

Finally, CBS Holdings argues that the award of costs and attorneys'

fees in HexFed's favor is due to be reversed and that, instead, the trial

court should have awarded such costs and fees to CBS Holdings. It argues

that it "is entitled to recover attorneys' fees incurred in enforcing the

Lease" because (1) "HexFed's right to occupy Bay 301 expired as of March

31, 2017," and (2) the 2016 lease in its entirety "expired on March 31,

2021." CBS Holdings' brief at 45-46. In response, HexFed argues that the

trial court's award of costs and attorneys' fees in its favor was proper

because it was " ' forced to file this action' " due to CBS Holdings' rejection

of its lease renewal. HexFed's brief at 29.

Generally, "a prevailing party in litigation is not entitled to an

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award of attorney fees unless those fees are provided for by statute or by

contract or if they are otherwise justified for certain equitable reasons."

Guardian Builders, LLC v. Uselton, 154 So. 3d 964, 970 (Ala. 2014). Here,

§ 10.3 of the 2016 lease provides for the recovery of costs and attorneys'

fees:

"All costs incurred by either party in connection with
collecting any amounts and damages owing by the other party
pursuant to the provisions of this Lease or to enforce any
provision of this Lease, including by way of example, but not
limitation, reasonable attorneys' fees from the date any such
matter is turned over to an attorney, shall also be recoverable
from the other party."

(Emphasis added.) Pursuant to this provision, the trial court awarded

HexFed attorneys' fees "[b]ecause HexFed was forced to file th[e] action"

after CBS Holdings "rejected" its renewal and sought to impose higher

rental rates than the 2% increase provided by the renewal provision in

the 2016 lease. As explained above, HexFed's initiation of this litigation

was an effort to enforce the lease, which is covered by § 10.3, and HexFed

has been successful. Therefore, the trial court's award of costs and

attorneys' fees to HexFed was proper.

Conclusion

Based on the foregoing, we affirm the trial court's judgment in favor

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of HexFed on its claims against CBS Holdings and on CBS Holdings'

counterclaims against it. We also affirm the trial court's award of costs

and attorneys' fees to HexFed.

AFFIRMED.

Parker, C.J., and Shaw, Wise, Bryan, Stewart, and Mitchell, JJ.,

concur.

Sellers and Mendheim, JJ., concur in the result.

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