Wilcox Investment Group, LLC v. P & D, LLC

223 So. 3d 903, 2016 WL 5817689, 2016 Ala. LEXIS 112
CourtSupreme Court of Alabama
DecidedSeptember 30, 2016
Docket1150025; 1150052
StatusPublished

This text of 223 So. 3d 903 (Wilcox Investment Group, LLC v. P & D, LLC) 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
Wilcox Investment Group, LLC v. P & D, LLC, 223 So. 3d 903, 2016 WL 5817689, 2016 Ala. LEXIS 112 (Ala. 2016).

Opinion

PER CURIAM.

Wilcox Investment Group, LLC (‘Wilcox Investment”), Foley Investment Partners, LLC (“Foley”), and Wilcox Communities, LLC (“Wilcox Communities”)1 (hereinafter collectively referred to as “Wilcox”), appeal from a judgment of the Baldwin Circuit Court awarding P & D, LLC (“P & D”), $122,291 on P & D’s claims alleging the breach of two leases involving two condominium units formerly owned by P & D. P & D appeals the trial court’s judgment on the grounds that the damages the trial court awarded were insufficient and that the trial court erred in failing to award it attorney fees. We consolidated the appeals for the purpose of writing one opinion.

I. Facts

The genesis of this litigation is a condominium development in Foley, Alabama, known as Sea Pines of Bon Secour Condominiums (“the condo project”). The developer of the condo project was Sea Pines, LLC (“Sea Pines”). Sea Pines began to develop the condo project in September 2006; plans called for 84 residential'condominium units (21 buildings of 4 units each), a clubhouse, a pool, and other amenities. On September 15, 2006, Sea Pines executed a note with Superior Bank for a construction ánd development loan, secured by a mortgage on the land to be developed.

On September 27,2007, Sea Pines filed a “Declaration of Condominium of Sea Pines at Bon Secour, A Condominium” (“the declaration”), in the Baldwin probate office in accordance with the Alabama Uniform Condominium Act, Ala. Code 1975, §§ 35-8A-101 - 35-8A-417 (“the AUCA”). The declaration included core aspects of the condo project such as the plans and plats, the condominium association’s bylaws, and special rights reserved to Sea Pines as the developer of the condo project.

The AUCA provides, in part:

“(a) The declaration for a condominium must contain:
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“(8) A description of any development rights specified in Section 35-8A-103(11) and other special declarant rights- specified in Section 35-8A-103(24) reserved by the declarant, together with a legally sufficient description of the’real estate to which each of those rights applies, and. a time limit within which each of those rights must be exercised....”

§ 35-8A-205(a)(8), Ala. Code 1975 (emphasis added). The AUCA defines “special de-clarant rights” as

“[rjights reserved for the benefit of a declarant (i) to complete improvements indicated on-plats and plans filed with the declaration (Section 35-8A-209); (ii) to exercise any development right (Section 35-8A-210); (iii) to maintain sales offices, management offices, signs advertising the condominium, and models (Section 35-8A-215); (iv) to use 'easements through the common elements for the purpose of making improvements within the condominium or within real estate which may be added to the condominium (Section 35-8A-216); (v) to make the condominium subject to a master [905]*905association (Section 35-8A-220); (vi) or to appoint or remove any officer of the association or any master association or any board member during any period of declarant control (Section 35-8A-303(d)).”

§ 35-8A-103(24), Ala. Code 1975 (emphasis added). Section 35-8A-215, Ala. Code 1975, provides, in part:

“A declarant may maintain sales offices, management offices, and models in units or on common elements in the condominium only if the declaration so provides and specifies the rights of a declar-ant with regard to the number, size, location, and relocation thereof. Any sales office, management office, or model not designated a unit by the declaration is a common element, and if a de-clarant ceases to be a unit owner, he ceases to have any rights with regard thereto unless it is removed promptly from the condominium in accordance with a right to remove reserved in the declaration. ...”

(Emphasis added.) The Commissioner’s Commentary 1 to § 215 further explains:

“This section prescribes the circumstances under which portions of the condominium—either units or common elements—may be used for sales offices, management offices, or models. The basic requirement is that the declarant must describe his right to maintain such offices in the declaration. There are no limitations on that right, so that either units owned by the declarant or other persons, or the common elements themselves, may be used for that purpose. ...”

(Emphasis added.)

The declaration defines “ ‘Developer’ or ‘Declarant’ ” as “Sea Pines, LLC, an Alabama limited liability company, and its successors and assigns.” § 2.01(M). Section 5.02 of the declaration provides:

“Use for Sales Purposes. All Units and the Common Elements shall be subject to the statutory right concerning sales and management offices and models in Units and the Common Elements in favor of the Developer allowed by § 35-8A-215 of the [AUCA]. The Developer otherwise expressly reserves the right to use one (1) or more Units owned by the Developer for management offices and/or sales and leasing offices. The Developer reserves the right to relocate offices and/or models from time to time within the Property. The Developer further reserves the right to maintain on the Common Elements advertising signs in any location or locations and from time to time to relocate and/or remove the same, all in the sole discretion of the Developer.”

(Emphasis added.) Thus, in accordance with provisions of the AUCA and the declaration, among the special declarant rights possessed by Sea Pines was the right to maintain models in units of the condo project.

By October 2007, Sea Pines had built the clubhouse and one building of condominiums consisting of four units. To get more money released from its construction loan, Sea Pines needed to sell at least two of those units. Patty Lee, a licensed realtor, was the exclusive listing agent for the condo project. Keith Clay, Sea Pines’ managing agent, made a proposal to Lee that she in turn shared with Dave Wirtes, an attorney,2 for the sale of two units, [906]*906which would mutually benefit Sea Pines and Lee and Wirtes. The proposal involved Sea Pines selling two units to Lee and Wirtes contingent upon Lee and Wirtes leasing the units back to Sea Pines to use as sales models. Wirtes testified that Clay represented the deal as one in which “there would be no money out of [Wirtes’s] pocket” and “[at] the end of the buildout of Phase I [of the condo project] I would own the two units outright,”3

To this end, Lee and Wirtes formed P & D. On October 28, 2007, P & D executed purchase agreements with Sea Pines for the purchase of unit 103 for $282,160 and unit 104 for $257,771. P & D financed the purchases through First National Bank of Baldwin County. On the same day, Sea Pines executed lease agreements with P & D in which P & D agreed to lease to Sea Pines unit 103 for $2,200 per month and unit 104 for $2,100 per month on the condition that Sea Pines “shall use the premises as a model home for real estate purposes.” The leases stated that they would terminate on “November 9, 2009, or sale by Sea Pines, ■ LLC, of final unit of Phase I of project known as Sea Pines at Bon Secour, whichever is later.”4 The final paragraph of each of the leases (“paragraph 10”) provided:

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Cite This Page — Counsel Stack

Bluebook (online)
223 So. 3d 903, 2016 WL 5817689, 2016 Ala. LEXIS 112, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wilcox-investment-group-llc-v-p-d-llc-ala-2016.