## Facts

- Alabama state and local officials assembled an incentive package to induce Hyundai to build an automobile manufacturing plant in Montgomery, including providing “free land.”
- The Industrial Development Board of the City of Montgomery (IDB) obtained option agreements on multiple parcels as the vehicle through which public funds flowed and to facilitate tax incentives; the City and County provided purchase funds.
- Two sets of landowners (the “McLemore group” and the “Russells”) executed separate option agreements with the IDB for their properties.
- Each option agreement included a “most-favored-nation” clause that the landowners claimed entitled them to the highest per-acre price paid to any landowner whose land was acquired for the project.
- The landowners alleged that after the IDB exercised the options, they were paid less per acre than at least one other landowner included in the site assembly.
- The landowners sued the IDB and Hyundai for breach of contract, alleging the IDB acted on Hyundai’s behalf and that the most-favored-nation pricing obligation was violated.
- The trial court granted summary judgment for Hyundai and the IDB; the landowners appealed, and the appeals were consolidated.

## Issues

1. Whether subsequent agreements or amendments modified or superseded the original option agreements’ most-favored-nation pricing provisions.
2. Whether the most-favored-nation clause required matching the highest per-acre price paid for any other parcel in the project, and whether that obligation survived later contract documents.
3. Whether Hyundai and/or the IDB could be held liable for breach of contract under the written agreements and the asserted agency/beneficiary theories.
4. Whether genuine issues of material fact and competing inferences about contractual intent and effect precluded summary judgment.

## Decision

- The Supreme Court of Alabama affirmed the summary judgments in part, reversed in part, and remanded.
- The court held that summary judgment was improper on portions of the disputes where the interaction between the most-favored-nation clause and later agreements could not be resolved as a matter of law.
- The court left intact portions of the trial court’s rulings where the contract language and record conclusively favored the defendants.

## Legal Principles

- Parties may modify their agreement; when a subsequent agreement contradicts an earlier agreement, the later agreement controls.
- Summary judgment is reviewed de novo; evidence is viewed in the light most favorable to the nonmovant, and judgment is improper if material fact disputes exist.
- Unambiguous contract language is enforced as written; related documents may be read together to determine overall intent.
- If the contract documents and surrounding circumstances support more than one reasonable inference about intent or modification, fact issues may require trial rather than summary judgment.

## Conclusion

The court issued a mixed disposition in consolidated land-option disputes arising from a public incentive package for Hyundai, holding that although some claims failed as a matter of law, other claims involving the continued effect of a most-favored-nation clause and the effect of later agreements presented factual and interpretive disputes that could not be resolved on summary judgment and required further proceedings.


McLemore v. Hyundai Motor Mfg. Ala., LLC, 7 So. 3d 318 (Ala. 2008)