Riverbend Ass'n v. Riverbend, LLC

204 So. 3d 870, 2015 Ala. Civ. App. LEXIS 178
CourtCourt of Civil Appeals of Alabama
DecidedJuly 24, 2015
Docket2130579
StatusPublished

This text of 204 So. 3d 870 (Riverbend Ass'n v. Riverbend, LLC) 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
Riverbend Ass'n v. Riverbend, LLC, 204 So. 3d 870, 2015 Ala. Civ. App. LEXIS 178 (Ala. Ct. App. 2015).

Opinions

On Application for Rehearing

THOMAS, Judge.

The opinion of April 10, 2015, is withdrawn, and the following is substituted therefor.

In 1974, Anne Homes, Inc., constructed a condominium development. As part of its development of the project, Anne Homes constructed a sewage-treatment plant on land adjacent to the condominium development. The sewage-treatment plant was intended to serve the condominium development.

In November 1974, Anne Homes entered into what was entitled a lease (“the 1974 agreement”) with The Riverbend Association, Inc. (“RAI”), an association composed of the owners of the units in the condominium development, and Riverbend Marina Company, Inc. (“the marina”). The 1974 agreement was for a five-year term, with nine automatic-renewal terms of five years each; however, RAI and the marina could elect not to renew the 1974 agreement. The 1974 agreement granted possession of the sewage-treatment plant to RAI and the marina. RAI and the marina were required to perform all maintenance on the sewage-treatment plant. RAI and'the marina were each responsible [872]*872for one-half of the monthly rental payment under the 1974 agreement, and, initially, they were to divide the expenses of the operation of the sewage-treatment plant on a percentage basis, with the marina being responsible for 10% of the expenses of operating the sewage-treatment plant and RAI being responsible for the remaining 90%.

In 1981, Anne Homes defaulted on the mortgage secured by the property upon which the sewage-treatment plant was located. The Peoples National Bank of Huntsville (“the bank”) foreclosed on the mortgage and purchased the property at the foreclosure sale. .When the bank took possession of the property, the sewage-treatment plant was in need of significant repairs, which the bank made. After the foreclosure, the marina was no longer an extant entity, and the bank and RAI entered into what was labeled as an amendment to the 1974 agreement (“the 1981 amendment”). The 1981 amendment, however, specified that the 1974' agreement had not actually been a lease but had instead been a license agreement permitting RAI and the marina to use the sewage-treatment plant.1 The 1981 amendment clarified that the bank and RAI were entering into a license agreement, and it deleted or modified certain provisions of the 1974 agreement, including deleting the provision requiring rent payments and replacing the provision governing the division of the expenses of operating the sewage-treatment plant. The 1981 amendment required that the bank pay 10% of the expenses of operating the sewage-treatment plant and that RAI pay 90%. The provision governing the division of the expenses further stated:

“If, at any time in the future additional sewer line taps are made into the [sewage-treatment plant], the parties agree that thereafter all expenses of the operation of the [sewage-treatment plant] shall be apportioned on a pro rata basis among the users based on the number of units using the treatment facility system. The Bank, its successors and assigns, shall remain in full control and possession of the [sewage-treatment plant] at all times and shall have the right, at any time, and from time to time, to allow additional sewage taps into the [sewage-treatment plant], provided, however, that in no event shall the Bank, its successors or assigns, allow any taps which would result in exceeding the [sewage-treatment plant’s] capacity.”

Also in 1981, the bank sold the sewage-treatment plant to River Bend, Ltd. The deed from the bank to River Bend, Ltd., specifically references the 1974 agreement and the 1981 amendment. In addition, the bank and River Bend, Ltd., executed a document entitled “Assignment of Interests and Assumptions of Obligations Agreement” (“the assignment agreement”). Under the assignment agreement, among other things, River Bend, Ltd., assumed the obligations of the bank under the 1974 agreement and the 1981 amendment. River Bend, Ltd., operated the sewage-treatment plant from mid-1981 to October 2010. During that time, River Bend, Ltd., billed RAI for, and RAI paid, 90% of the expenses associated with the operation of the sewage-treatment plant.

In October 2010, River Bend, Ltd., conveyed the sewage-treatment plant to Riv-[873]*873erbend, LLC. The deed from River Bend, Ltd., to Riverbend, LLC, did not contain any reference to the 1974 agreement, the 1981 amendment, or the assignment agreement. Riverbend, LLC, or River Bend Marina, LLC (hereinafter referred to collectively as “Riverbend”),2 continued the billing practices instituted by River Bend, Ltd., and billed RAI for 90% of the expenses associated with the operation-of the sewage-treatment plant,. In 2011, however, RAI determined that, because additional sewer taps had been added, RAI was no longer responsible for 90% of the expenses associated with the operation of the sewage-treatment plant. Based on the increased number of users, RAI calculated its pro rata share of the expenses associated with the operation of the sewage-treatment plant to be approximately 72%, and RAI began paying. Riverbend that reduced amount in June 2011. Riverbend objected to RAI’s unilateral reduction of the payments, and Riverbend threatened to terminate sewer service to the condominium development.

In March 2012, RAI sued Riverbend and fictitiously named parties, seeking a judgment declaring that Riverbend was bound by the terms and conditions of the 1974 agreement and the 1981 amendment. RAI also sought an accounting, an injunction to prevent Riverbend from terminating sewer service to the condominium development, and damages for breach of contract, which damages it claimed had resulted from Riv-erbend’s billing RAI more than the amount required by the 1981 amendment.3 Riverbend filed an answer,-which it later amended to add counterclaims - seeking a judgment declaring that Riverbend was not bound by the terms of the 1974 agreement and the 1981 amendment, that River-bend was entitled to change the billing plan for its services to a per-user billing plan based on consumption, and that Riv-erbend was entitled to include in its billing a profit margin. Riverbend also sought damages for breach of contract or unjust enrichment based on RAI’s failure to pay in full the amount Riverbend had billed RAI.

RAI moved for a partial summary judgment. In its motion, RAI requested that the trial court determine that it had an irrevocable license to use the sewage-treatment plant and that Riverbend was bound by the terms of the 1974 agreement and the 1981 amendment. Riverbend opposed RAI’s motion and filed a cross-motion for a summary judgment, in -which it argued that it was not bound by either the 1974 agreement or the 1981 amendment and that Riverbend was entitled to charge RAI reasonable fees for the sewer service Riv-erbend provided. Riverbend specifically sought a judgment in its favor determining that Riverbend had acquired title to the sewage-treatment plant free from the obligations imposed by the 1974 agreement and the 1981 amendment, that Riverbend could include a profit margin in its billing for sewer services, that Riverbend could [874]*874change its billing practice to bill users individually, and that RAI owed Riverbend the remaining balance between the amount RAI paid and the amount it had been billed for the sewer services provided between June 2011 and the date of the judgment.

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Bluebook (online)
204 So. 3d 870, 2015 Ala. Civ. App. LEXIS 178, Counsel Stack Legal Research, https://law.counselstack.com/opinion/riverbend-assn-v-riverbend-llc-alacivapp-2015.