Gower v. Turquoise Properties Gulf, Inc.

191 So. 3d 776, 2013 WL 6703453, 2013 Ala. LEXIS 184
CourtSupreme Court of Alabama
DecidedDecember 20, 2013
Docket1120045
StatusPublished
Cited by1 cases

This text of 191 So. 3d 776 (Gower v. Turquoise Properties Gulf, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gower v. Turquoise Properties Gulf, Inc., 191 So. 3d 776, 2013 WL 6703453, 2013 Ala. LEXIS 184 (Ala. 2013).

Opinion

MURDOCK, Justice.

Charles A. Gower asks this Court to vacate an arbitration award in favor of-Turquoise Properties Gulf, Inc. (“Turquoise Properties”), Caribe Realty, Inc., Larry Wireman, and Judy Ramsey Wire-man (hereinafter collectively referred to as “Turquoise”) that concerned Gower’s pre-construction agreement to purchase a condominium unit in- a complex developed by Turquoise Properties. We reverse the judgment of the circuit court affirming the arbitration award -and remand the case.

I. Facts and Procedural History

Gower is a practicing attorney who, according'to the arbitrator’s award, “has had numerous real -estate developments and still owns condominiums in the Gulf area.” In April or 'May 2005, Gower found out about Turquoise Place, a condominium development Turquoise Properties was developing in Orange Beách (“the complex”).1 Gower contacted 'Jüdy Wireman, an employee óf Caribe Realty, Inc., and the real-estate agent for- Turquoise Properties, about the'prospect of purchasing a condominium unit in the complex. Gower testified that Wireman ‘advised him that Tower I of the complfex was completely sold out and that there were only a few units left to purchase in Tower II. Gower further testified that sales personnel for Turquoise Properties created the impression that if a person did not act quickly, he or she would miss out on owning a condominium' unit in the complex.2 Wireman testified that she never communicated with anyone that the units in Tower I were sold out, but the arbitrator concluded that,

.“[h]owever it was related, the emphasis was that the commodity was hot, Tower I had nothing'available (and most common Purchasers would have assumed that it meant it was sold out) and that you better rush if you want to get a unit in Tower II because they aré selling out quickly.”

[778]*778On May.. 11, 2005, Gower, through his son, signed an escrow agreement to purchase a unit in Tower II-of the complex for a purchase price of $1,270,900. .Gower put down a deposit of $254,180 on the property. The purchase agreement contained an arbitration clause that provided that disputes relating to the property would be arbitrated and that arbitration would be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“the FAA”). .

In 2008, Gower visited the site of. the development and discovered that several units-, in the complex, including units in Tower I, had not actually been sold. The arbitration, award stated that “all of the units in Tower I were never sold out.” Gow;er testified that as a result of .Turquoise’s misrepresentation , regarding the units available in Tower I, he .decided not to close on his unit. On August 10, 200⅞ Gower sent his “Notice of Rescission” of the purchase agreement to Turquoise Properties.

On September 17, 2009, Gower filed an “Arbitration Demand” with the American Arbitration Association against Turquoise. Among other claims in this first demand,3 Gower made claims of common-law fraud and misrepresentation, alleged violations of Alabama’s Uniform Condominium Act, § 35-8A-101 et seq., Ala.Code 1975 (“the AUCA”), and alleged violations of the Interstate Land Sales Full Disclosure Act, 15 U.S.C. § 1701 et seq. (“the ILSFDA”)— specifically for violations of the ILSFDA’s regulatory-requirement provisions in 15 U.S.C. § 1703(a)(1) and its antifraud provisions in 15 U.S.C. § 1703(a)(2).4

On October 5, 2009, Gower filed his “First Amended Arbitration Demand.” In this amended arbitration demand, Gower essentially repeated the claims he had originally made against Turquoise. On October 15, 2009, Turquoise .filed its answer to Gower’s first amended arbitration demand. In that answer, in a section titled “Affirihative Defenses,” Turquoise stated that Gower’s “claims are barred by the applicable statute of limitations.”

On April 13, 2011, Gower and claimants Steven, J. Becker and Hazel Denise Becker, Mike Alfred, B. Todd Davis and Keith Holland, Mark D. Stephens, and. Weiser Properties, LLC (collectively “the claimants”), filed an “Amended & Consolidated Arbitration Demand” against Turquoise. In relevant part, the claimants alleged violations of the ILSFDA’s antifraud provisions — specifically 15 U.S.C. § 1703(a)(2)(A)-(C), violations of the AUCA, and common-law fraud.5

On,May 6, 2011, Turquoise filed its answer to the amended and consolidated arbitration demand. The answer contained a section titled “Affirmative Defenses” in which Turquoise stated that “[claimants’ claims are barred by the applicable statute of limitations.”

On October 14, 2011, Turquoise-filed a “Request for . Interim Award” in which it asked the arbitrator ,.

“to enter an interim award, against Claimants for their claims under Sections 1703(a)(1), 1703(a)(2)(D), 1703(b), 1703(c), 1703(d), and 1703(e), of the [ILSFDA] because said claims are time-[779]*779barred by the statute of limitations period under 15 U.S.C. [§ ] 1711.”

In this filing, Turquoise noted that

“[section 1711(a)(1) of the [ILSFDA] provides that no action at law or equity shall be maintained for civil liabilities under Section 1709 of the Act with respect to a violation of Sections 1703(a)(1) or 1703(a)(2)(D) of the [ILSFDA] more than three (3) years after the date of the signing of the contract of sale or lease.”

Turquoise further observed that all the claimants had “filed their original arbitration demands more than three (3) years from the date they signed their purchase and escrow agreements.” . Accordingly, Turquoise requested that the arbitrator dismiss “[c]laimants’ claims for violations of Sections 1703(a)(1) and 1703(a)(2)(D) of the [ILSFDA].”

Ón Octobér 19, 2011, the claimants filed a “Response to Motion for Interim Award” in which they stated that Turquoise’s

“motion for interim award only concerns [ILSFDA] statutes that [claimants have not asserted claims under,, specifically 1703(a)(1),. (a)(2)(D), and 1703(b)-(e). These are [ILSFDA] regulatory provisions. Claimants’ claims, however, do arise under §§ 1703(a)(2)(A), (a)(2)(B), and/or (a)(2)(C). These are [ILSFDA.] misleading sales practices provisions which are subject to a longer statute of limitations,”

The claimants further noted that 15 U.S.C. § 1711(a)(2) provides that claims based on “violation[s] of subsection (a)(2)(A), (a)(2)(B), or (a)(2)(C) of section 1703” are barred if they are brought “more than three years after discovery of the violation or after discovery should have been made by the exercise of reasonable diligence.” The claimants contended that they filed then* arbitration demands within three years of their discovery of Turquoise’s misrepresentations. Accordingly, they argued that Turquoise’s motion for an interim award was due to be denied.

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191 So. 3d 776, 2013 WL 6703453, 2013 Ala. LEXIS 184, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gower-v-turquoise-properties-gulf-inc-ala-2013.