Loxley South, LLC. v. Western Express, Inc.

• Court: Court of Appeals for the Eleventh Circuit
• Decided: May 31, 2012
• Docket: 11-14009
• Status: Unpublished

Opinion

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED ________________________ U.S. COURT OF APPEALS ELEVENTH CIRCUIT No. 11-14009 MAY 31, 2012 ________________________ JOHN LEY CLERK D.C. Docket No. 1:10-cv-00024-KD-N

LOXLEY SOUTH, L.L.C.,

Plaintiff-Counter Defendant-Appellant,

versus

WESTERN EXPRESS, INC.,

llllllllllllllllllllllllllllllllllllllll Defendant-Counter Claimant-Appellee.

________________________

Appeal from the United States District Court for the Southern District of Alabama _______________________

(May 31, 2012)

Before DUBINA, Chief Judge, EDMONDSON, Circuit Judge, and GOLDBERG,* Judge.

PER CURIAM:

* Honorable Richard W. Goldberg, United States Court of International Trade Judge, sitting by designation. I. BACKGROUND

This dispute arises from Appellee Western Express’s (“Western”) failure to

construct a road on a parcel of land within six months of closing, as required by its

contract with Appellant Loxley South (“Loxley”). Western Express contends that

the contract was void and unenforceable ab initio because it violated certain

provisions of Alabama law and the Subdivision Regulations of the Town of

Loxley. The district court granted summary judgment to Defendant-Appellee

Western, holding that the contract was void ab initio. Loxley now appeals.

II. STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1332. We review a district

court’s grant of summary judgment de novo. Nat’l Parks Conservation Ass’n v.

Norton, 324 F.3d 1229, 1236 (11th Cir. 2003). Summary judgment is granted if there

is no “genuine dispute as to any material fact.” Fed. R. Civ. P. 56(a).

III. DISCUSSION

The district court held that the contract was unenforceable ab initio because it

violates Alabama law and the Subdivision Regulations of the Town of Loxley

(“Subdivision Regulations”). Both section 3.0 B of the Subdivision Regulations and

Alabama’s Subdivision Control Statutes (“Subdivision Control Statutes”) prohibit

selling land in a proposed subdivision if the subdivision plat has not received final

2 approval and has not been recorded in the county probate records. Subdivision

Regulations, § 3.0 B., Ala. Code §11-52-33 (2012) (“section 33”). Further, contracts

that violate the Subdivision Control Statutes are void and unenforceable under

Kilgore Dev. v. Woodland Place, L.L.C., 47 So. 3d 267, 271 (Ala. Civ. App. 2009)

(holding that “a contract obtained in violation of the subdivision control statutes is

void”).

On appeal, Loxley argues that (A) the property at issue is excluded from the

Subdivision Regulations, and (B) even if it is not exempt, the contract is not void

because Kilgore does not apply.

A. The Property Is Not Exempt from the Subdivision Regulations

Section 4.4 B of the Subdivision Regulations states that:

4.4 Applicability: The following shall not be included within the definition of subdivision or be subject to the requirements thereof: .... B. The division of land into parcels greater than five (5) acres where no street construction is involved. Any further division of this original tract will require recording of a subdivision plat.

(emphasis added).

Thus, exclusion under section 4.4 B has two requirements: (1) that the division

of land results in parcels of greater than five acres; and (2) that street construction is

not involved. Loxley fails to demonstrate that it satisfies either of these two

requirements. Therefore, the property is not excluded from the Subdivision 3 Regulations.

First, Loxley improperly characterizes the property described in the contract

as consisting of approximately fifty acres. Appellant Brief at 13–14, 24. The

Subdivision Regulations and the Subdivision Control Statutes specify that

descriptions of metes and bounds in the instrument of transfer will not exempt the

transaction from the relevant penalties. Doc. 71 at 114, Ala. Code §11-52-33. Thus,

Loxley cannot rely on its metes and bounds description as a basis for its assertion

that the transaction involved a parcel of land greater than five acres. Loxley sold

Western seventeen lots in the subdivision, fifteen of which were less than five acres.1

Second, road construction is “involved” in this division of land. If, as here,

subdivision of the land results in parcels with no street access, the Subdivision

Regulations require street construction for the land to be developed. See Subdivision

Regulations, §5.2 B.6. Contrary to Appellant’s assertions, the term “involved” is not

ambiguous. Further, road construction is clearly “involved” here because both the

Subdivision Regulations and the contract between the two parties require road

construction. In fact, Western’s failure to construct the road created the controversy

underlying Loxley’s original complaint.

1 Don Rowe, witness for Appellant, testified that the property sold to Western Express “consisted of seventeen lots, totaling approximately fify acres.” Doc. 77-3 at 6 (emphasis added).

4 Here, the subdivision of land resulted in parcels of less than five acres.

Moreover, street construction was clearly involved. Therefore, the property is not

excluded from the Subdivision Regulations under section 4.4 B.

B. Kilgore Applies and Renders This Contract Void and Unenforceable

A contract made in violation of section 33 of the Subdivision Control Statutes

is void and unenforceable. Kilgore, 47 So. 3d at 271. Appellant unsuccessfully

attempts to distinguish this situation from Kilgore.

First, Appellant argues that this contract, unlike that at issue in Kilgore, was

an agreement to sell “an entire subdivision.” This characterization is incorrect

because Exhibit A clearly shows that Loxley South sold lots 2–8, 13–17, 20, 23, and

26, but kept the other lots and still owns those lots today. Doc. 89-3 at 24.

Appellant also argues that, unlike the sales in Kilgore, the master plan here had

been approved prior to the execution of the Agreement. See Appellant Brief at 40.

However, this is not accurate because only preliminary approval had been granted.

Under the Subdivision Regulations, the approval must be certified on the plat, and the

Planning Commission and the Town Council must approve the plat. See Subdivision

Regulations, §3.2E. Even after preliminary approval, final inspections are still

required.

Finally, Loxley claims that “unlike the sale at issue in Kilgore, the parties here

5 contemplated the future approval of the Loxley Planning Commission of a fully

engineered subdivision plat prior to the sale of any lots [. . . .] within the proposed

subdivision.” Appellant Brief at 40. This is also incorrect. The court in Kilgore

clearly stated that the contract between Kilgore and Woodland Place was conditional

upon, and required, the future approval and recording of the subdivision. Kilgore, 47

So. 3d at 268.

Like Kilgore, this case involves an agreement to sell various lots within a

subdivision; the master plan had not been approved prior to the sale; and the contract

was conditional upon future approval of the subdivision. Therefore, Kilgore applies

here and because the contract violates section 33 of the Subdivision Control Statutes,

it is also void and unenforceable.

IV. CONCLUSION

The Court AFFIRMS the district court’s order.