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SUPREME COURT OF ALABAMA
OCTOBER TERM, 2009-2010 ____________________ 1081516 ____________________ N & L Enterprises, LLC v. Lioce Properties, LLP Appeal from Madison Circuit Court (CV-07-965) WOODALL, Justice. N & L Enterprises, LLC ("N & L"), entered into a lease with Lioce Properties, LLP, in January 2006 for office and warehouse space in a building owned by Lioce Properties. Lioce Properties later sued N & L, alleging that N & L had defaulted on its obligations under the lease. The trial court

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entered a summary judgment in favor of Lioce Properties, finding that N & L had breached the lease and awarding Lioce Properties $939,845.14. N & L appealed. We affirm in part,

reverse in part, and remand. Facts and Procedural History N & L, whose primary business involves copier sales and service, was originally owned by Nicholas Lioce, Jr.; his wife, Louise Lioce; and their sons, Nick Lioce ("Nick") and Harry Lioce ("Harry"). In 2000, the Lioces sold N & L to Berney,

Berney, Inc., a division of Global Imaging, Inc. Inc., retained Nick as the president of N & L.

According to N & L, while Nick was managing N & L, he suggested to Harry, who was the chief operating officer of Interconnect Systems Corporation ("Interconnect"), that N & L and Interconnect work together to obtain a copier-service contract with the United States Army at Redstone Arsenal ("the AMCOM contract"). N & L could not pursue the AMCOM contract

on its own, because the contract was set aside for small businesses, i.e., a small-business set-aside contract, and On the other

N & L was too large to qualify for the contract.

hand, Interconnect qualified as a small business for purposes

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of the AMCOM contract but, according to N & L, Interconnect did not, at that time, have the ability to provide copier service. In January 2004, N & L and Interconnect entered into a partnering agreement, and Interconnect was successful in obtaining the AMCOM contract. N & L and Interconnect jointly Interconnect

worked on the AMCOM contract until August 2006.

paid N & L approximately 90% of the revenue it collected under the AMCOM contract. In January 2006, N & L entered into a commercial lease agreement ("the lease agreement") with Lioce Properties

pursuant to which N & L leased from Lioce Properties 20,565 square feet of office and warehouse space in a building located at 2950 Drake Avenue in Huntsville ("the building"). At that building. The events underlying this dispute began on August 4, 2006, when N & L terminated Nick's employment as its time, Interconnect was already a tenant in the

president.

On August 25, 2006, Interconnect terminated its

partnering agreement with N & L and took over the copierservice work under the AMCOM contract. N & L informed Lioce Properties that On August 30, 2006,

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"under the terms of the lease covering the space leased by N & L from [Nick's] family, N & L may terminate the lease if any competitive business is operated out of the building in which N & L is located. It now appears [Nick] and/or his family were in fact operating a competitive business in the building. Accordingly, we are evaluating all our options, including, without limitation, the termination of the lease." On May 2, 2007, Lioce Properties informed N & L that it considered N & L's failure to pay some of the rent owed for January 2007 a default under the terms of the lease, and it demanded payment of $2,746.77 plus a late charge and an attorney fee. On May 31, 2007, N & L informed Lioce

Properties that it was terminating the lease pursuant to

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