Deupree v. Ruffino

• Decision Date: 03 April 1987
• Citation: 505 So.2d 1218
• Parties: James L. "Skip" DEUPREE and Bay Development Corporation of Destin, Inc. v. Anthony RUFFINO, et al. James L. "Skip" DEUPREE and Bay Development Corporation of Destin, Inc. v. Roy ANDERSON, Jr., and Louise Milner Anderson. 85-407, 85-408.
• Court: Alabama Supreme Court

Page 1218

505 So.2d 1218

James L. "Skip" DEUPREE and Bay Development Corporation of Destin, Inc. v. Anthony RUFFINO, et al.

James L. "Skip" DEUPREE and Bay Development Corporation of Destin, Inc. v. Roy ANDERSON, Jr., and Louise Milner Anderson.

85-407, 85-408.

Supreme Court of Alabama.

April 3, 1987.

Michael W. Landers of Bell and Landers, Sylacauga, for appellants.

J. Clewis Trucks of Trucks and Trucks, Fairfield, for appellees Anthony Ruffino and Doris Ruffino.

R. Carlton Smyly of Cabaniss, Johnston, Gardner, Dumas & O'Neal, Birmingham, for appellees Roy Anderson, Jr., Louise Milner Anderson, and Daniel W. Gibson.

BEATTY, Justice.

These consolidated appeals ensue from judgments against James L. "Skip" Deupree and Bay Development Corporation of Destin, Inc. ("BDC") entered in two lawsuits which themselves were consolidated for trial. Roy Anderson, Jr., Louise Milner Anderson, and Daniel W. Gibson were awarded damages in one action. Anthony Ruffino and Doris Ruffino were awarded damages in the other action. The consolidated trial was held ore tenus without a jury, based upon allegations of breach of contract and fraud. We affirm.

The litigation arose out of purchases by the Andersons, the Ruffinos, and Gibson of townhouse units in a complex known as Pointe South located in Destin, Florida. Deupree, doing business as BDC, developed Pointe South, which fronted on a body of water known as Old Pass Lagoon. Each of the sales contracts contained a clause pertaining to the seller's constructing and furnishing a boat slip to each purchaser. Pertinent parts of this clause are quoted below:

"16. BOAT SLIP. That in connection with an agreement for purchase and sale of a townhouse unit at POINTE SOUTH for Lot 10, it is agreed between the parties that in connection with the purchase of said townhouse unit by the Purchaser a boat slip designated as Slip No. 5 of Pier 1 on the proposed 'Plat of Piers' of POINTE SOUTH, Destin, Florida, being part of the overall Phase I Plan as prepared by World Wide Design Associate Architects; shall be included and use thereof shall be transferred to the Purchaser in consideration of the purchase price of the unit as set forth in the Agreement for Sale, and that no additional costs be charged.

"....

"The Seller shall make a bona fide effort to construct said boat slips, and to have them available for use at or about the time the Notice/Certificate of Occupancy is issued on the unit itself for closing. There are no representations by Seller that said slips will be available for use at that time, and such does not create a default by the Seller herein. In the event the unit must be closed prior to the slip being available for use by Purchaser, an amount of $10,000.00 shall be held in an interest bearing account to inure to the purchaser with the Escrow Agent, DESTIN TITLE AND ABSTRACT COMPANY, INC., until said slip is constructed."

Gibson, who purchased one unit, executed his purchase contract on October 8, 1982; the Andersons executed their purchase contract for two units on May 1, 1983; and the Ruffinos executed their purchase contract for one unit in August of 1982. Gibson's purchase was closed on May 11, 1983, while the Andersons' purchase was closed on May 26, 1983, and the Ruffinos' purchase was closed on June 10, 1983. At the time of these closings, the boat docks in question were approximately 90% completed. Deupree told the purchasers that he had not obtained final approval for the boat slips, but that the documentation would be forthcoming; he said he was expecting approval at any time.

Notwithstanding the terms of the contract pertaining to the escrow account, Deupree and the Andersons agreed that only $1,500 per unit should be withheld, or a total of $3,000. Gibson, however, would not agree to pay Deupree the $10,000 amount designated for escrow, because his boat slip was incomplete, whereupon Deupree insisted that Gibson execute a promissory note and mortgage for $10,000 payable within seven days of completion of the boat slip. Gibson acquiesced in that proposal and executed the documents. The Ruffinos placed $8,000 in the escrow account.

The "approval" referred to above was a submerged land lease from the State of Florida. Florida law required approval from the Florida Department of Natural Resources, Bureau of Land Management, in the form of a submerged land lease, for construction of boat slips or structures over public waters, of which the water in question was a part. Deupree applied for such a lease in August 1982. As required by Florida law, his application was advertised publicly. Some objections having been received by the responsible public officials, Deupree was notified that a public hearing would be required. Deupree was asked to furnish a meeting place and select a date for the hearing. In a subsequent telephone conversation with the bureau director, Deupree inquired as to whether anyone else had gone through a public hearing, and, upon being informed that no recent hearings had occurred, Deupree requested a bureau representative to place his application on "hold," which was done.

Nevertheless, Deupree initiated construction of the boat docks without official approval. When the Bureau of Land Management learned of this construction and asked for an explanation, Deupree stated that he had had nothing to do with the development and had turned everything over to the condominium owners. At that time, none of the sales of the units had been closed. Deupree was informed that he would have to assign his application for a submerged land lease to the unit purchasers. No assignment was made. Instead, Deupree began closing the units, representing to the purchasers that he expected approval at any time.

Later, in July 1984, after their closings, the purchasers learned from representatives of the Department of Natural Resources that Deupree had told them that the individual purchasers were responsible for the construction. And, in 1985, while these suits were pending, the purchasers learned that Deupree himself had put the application for the lease "on hold."

On October 9, 1984, two interpleader actions were filed in Talladega County by the escrow agent, Mark E. Frederick, an attorney in Destin. One petition named Deupree, individually, who is a resident of that county; BDC; and the Ruffinos, whose $8,000 escrow account held for completion of the boat dock was paid into court. The other petition named Deupree, individually; BDC; and the Andersons, whose $3,000 escrow account was paid into court.

The Andersons answered by claiming entitlement to the funds, as did BDC. The Andersons amended their answer to add a cross-claim against BDC and Deupree, claiming breach of contract. Gibson intervened and made a similar claim against Deupree and BDC. The Andersons and Gibson later amended their claims to allege fraud by Deupree in the sale of the units. BDC and Deupree made general denials. Likewise, the Ruffinos claimed breach of contract and fraud against Deupree.

Trial was had ore tenus without a jury, following which the trial court found for the plaintiffs against Deupree and BDC and awarded damages as follows: The Andersons: $40,000 compensatory and punitive damages; the Ruffinos: $20,000 compensatory and punitive damages; Gibson: $15,000 compensatory and punitive damages. The escrow deposits of the Andersons and the Ruffinos were adjudged credits on their judgments, while the cancellation of Gibson's note and mortgage were adjudged a credit on his judgment.

The defendants present three issues for our consideration, which will be addressed seriatim:

(1) Whether the trial court erred in finding that BDC and Deupree had breached the contract relative to the delivery of the boat slips.

(2) Whether the trial court erred in finding that Deupree and BDC defrauded the appellees.

(3) Whether the trial court erred in "piercing the corporate veil" of BDC and finding Deupree personally liable.

(4) Whether appellees' claims are barred by the statute of limitations.

Our review of these issues is governed by the principle of ore tenus review. That is, the trial court has wide discretion, and there is a strong presumption of correctness in its factual findings, which will not be disturbed on appeal unless they are unsupported by evidence or found to be clearly erroneous or against the great weight of the evidence. Ex parte Coughlin, 455 So.2d 18 (Ala.1984).

I. The Breaches of Contracts.

It is clear from the express language of the contract, as quoted above, that, "in consideration of the purchase price of the unit," the seller promised that "a boat slip ... shall be included and use thereof shall be transferred to the Purchaser." Other terms of the contract pertaining to the boat slip (or dock) referred to when it should be furnished, e.g., the money would be held in the escrow account "until said slip is constructed," but not to the obligation to furnish the slip. Even though there was no definite time stated in the contract for the completion of the boat docks, nevertheless "the law requires it to be done within a reasonable amount of time," Hendrix, Mohr & Yardley, Inc. v. City of Daphne, 359 So.2d 792 (Ala.1978), and "[w]hat is a reasonable time depends upon the nature of the act to be done and all the circumstances relating to that act." Ibid. This question is one...