Bank of America, N.A. v. Kinslow

114 So. 3d 827, 2012 WL 6062577, 2012 Ala. Civ. App. LEXIS 334
CourtCourt of Civil Appeals of Alabama
DecidedDecember 7, 2012
Docket2110632
StatusPublished
Cited by2 cases

This text of 114 So. 3d 827 (Bank of America, N.A. v. Kinslow) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bank of America, N.A. v. Kinslow, 114 So. 3d 827, 2012 WL 6062577, 2012 Ala. Civ. App. LEXIS 334 (Ala. Ct. App. 2012).

Opinion

THOMPSON, Presiding Judge.

Bank of America, N.A. (“Bank of America”), appeals from a judgment in favor of Evelyn J. Kinslow, as trustee of the Evelyn J. Kinslow Revocable Trust (“Kin-slow”). In the judgment, the trial court found that certain limited common elements assigned to a specific condominium unit were not subject to the mortgage Bank of America possessed as to that unit.

The evidence in the record on appeal indicates the following. Legacy Key is a condominium complex in Orange Beach. The complex contains 36 residential units. In addition to common elements of the complex, such as the swimming pool, the complex has the following “limited common elements”: 17 boat slips, 12 storage closets, and 8 carriage houses. The limited common elements were included in an amendment (“the first amendment”) to the declaration of condominium (“the declaration”), as required by § 35-8A-208(c), Ala. Code 1975, which is part of the Alabama Uniform Condominium Act (“the Act”), § 35-8A-101 et seq., Ala. Code 1975. The amendment provided that limited common elements would be appurtenant to the [829]*829units. It also allowed owners of units to reallocate limited common elements by an amendment to the declaration, which is required to be provided to the condominium association.

In December 2003, Ellen B. McKinney purchased Unit 903 in Legacy Key. The deed conveying the unit to McKinney included Unit 903, “together with Storage Closet Number 1” and “Boat Slip Number 6.” The deed stated that the storage closet and boat slip were appurtenances to Unit 903, in accordance with the declaration.

In July 2007 McKinney and her husband refinanced the original $322,700 loan that was used to purchase Unit 903 and obtained a new loan in the amount of $700,000. Bank of America was the lender, and it held a mortgage on Unit 903 to secure the loan. The mortgage document, which is referred to as the “Security Instrument” in that document (“the security instrument”), defined the property with a legal description of Unit 903, which legal description was attached to the security instrument. The legal description included the statement: “Together with the appropriate undivided interest in the common areas and facilities declared in [the declaration] to be appurtenant to the above described unit.” The security instrument also contained the following language regarding the property subject to the mortgage:

“TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the property. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing is referred to in this Security Instrument as the ‘Property.’ ”

Section 18 of the security instrument defined an interest in the property as “any legal or beneficial interest in the Property.” The security instrument provided that if the McKinneys sold or transferred all or any part of the property without Bank of America’s consent, then Bank of America could require immediate repayment of the loan in full.

On April 3, 2009, McKinney executed an amendment to the declaration, transferring Storage Closet Number 1 and Boat Slip Number 6 from Unit 903 to Unit 101. Kinslow is the owner of Unit 101. The record does not include the amount, if any, Kinslow paid McKinney for the right to use the storage closet and boat slip. The amendment was recorded in the Baldwin County Probate Court the same day it was executed.

Eight months later, on December 28, 2009, Ted Tessem, a title-company employee who “acted as agent to a transaction on” Unit 903, executed a scrivener’s affidavit revising the legal description of Unit 903 as it appeared in the attachment to the security instrument. In the affidavit, Tes-sem said the original security instrument “contains errors in the Legal Description” and that the revision “shall serve to correct the instrument referenced above which is incorrect due to a Scrivener error.” The revision added the following language to the legal description:

“TOGETHER WITH:
“Storage Closet Number 1, which is an appurtenance to the above Unit # 903 in accord with the Declaration of Condominium and Amendments thereto.
“Boat Slip Number 6, which is an appurtenance to the above Unit # 903 in accord with the Declaration of Condominium and Amendments thereto.”

In its brief on appeal, Bank of America states that the scrivener’s affidavit was recorded in the Baldwin County Probate Court on December 28, 2009. However, [830]*830the affidavit itself indicates that it was not recorded until February 9, 2010.

On August 2, 2010, Kinslow filed an action to quiet title to Storage Closet Number 1 and Boat Slip Number 6. She also sought -a judgment declaring that the amendment reallocating the storage closet and boat slip from Unit 903 to Unit 101 was valid and that the storage unit and boat slip were now for the exclusive use of Unit 101 and were not subject to Bank of America’s mortgage on Unit 903.

Kinslow and Bank of America each filed properly supported motions for a summary judgment. There is no dispute over the facts; the issues presented are clearly issues of law. After considering the motions, briefs, and arguments of the parties, in an order dated November 15, 2011, the trial court determined that the storage closet and boat slip were not appurtenances to Unit 903, the unit subject to the mortgage. It also found that those limited common elements were not described in the mortgage. Accordingly, it granted Kinslow’s motion for a summary judgment and asked her attorney to prepare a judgment.

In the judgment, entered on November 30, 2011, the trial court found that the exclusive use of limited common elements like the boat slip and the storage unit was not an appurtenance to Unit 903 such that the right was subject to the mortgage “in as much as this right was not set out or described in the mortgage as a right being conveyed to Bank of America.” Because the declaration allows limited common elements to be reallocated among units in the condominium complex, the trial court said, the exclusive right to use limited common elements does not “run with the land” but is a personal right of the unit owner that can be freely reallocated to another unit owner.

In reaching its conclusion, the trial court cited Miller v. Associated Gulf Land Corp., 941 So.2d 982, 985-86 (Ala.Civ.App.2005), for its definition of an appurtenant right, quoting the following from that case:

“In order for a covenant to be enforced as one that ‘runs with the land,’ it must both (1) have been intended by the parties creating it to run with the land and (2) touch and concern the land. See, e.g., Allen v. Axford, 285 Ala. 251, 231 So.2d 122 (1970); Smith v. First Sav. of Louisiana, FSA, 575 So.2d 1033 (Ala.1991); Patterson v. Atlantic Coast Line R. Co., 202 Ala. 583, 589, 81 So. 85, 91 (1919) (noting that, in keeping with the seminal English case known as ‘Spencer’s case’ (5 Coke, 16), ‘a covenant will not run with the land if it be merely collateral, and doth not touch or concern the thing demised’). In discussing these requirements, we find it convenient to utilize the following definitions stated in the Restatement (Third) of PropeHy (Servitudes) § 1.5 (2004):

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Bluebook (online)
114 So. 3d 827, 2012 WL 6062577, 2012 Ala. Civ. App. LEXIS 334, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-america-na-v-kinslow-alacivapp-2012.