Adkins v. Bluegrass Estates, Inc.

• Decision Date: 30 August 2011
• Docket Number: No. E2011–00044–COA–R3–CV.,E2011–00044–COA–R3–CV.
• Citation: 360 S.W.3d 404
• Parties: Anthony Ray ADKINS, et al. v. BLUEGRASS ESTATES, INC., et al.
• Court: Tennessee Court of Appeals

360 S.W.3d 404

Anthony Ray ADKINS, et al.

v.BLUEGRASS ESTATES, INC., et al.

No. E2011–00044–COA–R3–CV.

Court of Appeals of Tennessee, Eastern Section, at Knoxville.

Aug. 16, 2011 Session.Aug. 30, 2011.Permission to Appeal Denied by

Supreme Court Dec. 14, 2011.

Thomas J. Tabor, Jr., Tazewell, Tennessee, for the appellants, Daniel J. Tribell, and wife, Ruby Tribell, as Trustees of the Daniel J. Tribell and Ruby Tribell Living Trust.

Terry M. Basista, Jacksboro, Tennessee, for the appellees, Anthony Ray Adkins and wife, Raye Ann Adkins; Ronald D. Casey; John C. Coward and wife, Sandra Coward; John Delaura and wife, Michelle Delaura; Brain P. Goins and wife, Nichole Goins; David D. Gough; Mayford McCarter and wife, Helen McCarter; Michael J. McWhorter; David E. Miller and wife, Kathryn D. Miller; Teresa D. Poston; and, Kenneth Powell and wife, Carolyn Powell.

OPINION

CHARLES D. SUSANO, JR., J., delivered the opinion of the Court, in which HERSCHEL P. FRANKS, P.J., and JOHN W. McCLARTY, J., joined.

CHARLES D. SUSANO, JR., J.

The purchasers of lots in a “subdivision known as Timberlake Estates, Phase One”—described in a plat and restrictive covenants as a twenty-lot subdivision—acquired with their deeds the right to use a boat ramp and parking area to be located in a common area within the subdivision. When they learned that additional lots—not located within the combined acreage of the twenty lots—were being advertised for sale along with the right to use the same boat ramp and parking area, they filed this action against their predecessor in interest.¹ After a trial on the merits, the court held that only the purchasers of lots in “Phase One” were entitled to use the boat ramp and parking area. The defendant appeals. We affirm.

I.

A.

On or about July 9, 2003, Daniel J. Tribell and Ruby Tribell, Trustees of the Daniel J. Tribell and Ruby Tribell Living Trust (referred to herein collectively as “Tribell”) ², recorded in the office of the Claiborne County Register of Deeds a document styled “Protective and Restrictive Covenants of Timberlake Estates Phase One” (“the Declaration”). Daniel Tribell, who is an attorney licensed in Kentucky, drafted the instrument. The terms pertinent to this dispute are

WHEREAS, the undersigned, Daniel J. Tribell and Ruby Tribell, Trustees of the Daniel J. Tribell and Ruby Tribell Living Trust, are the owners of the following described subdivision known as Timberlake Estates, Phase One, which has been subdivided and recorded, and which proposes to restrict by this instrument, and

WHEREAS, said subdivision is known as Timberlake Estates, Phase One, on Jones Ridge Road, Speedwell, Claiborne County, Tennessee, and a map or plat of said subdivision is of record in the Register of Deeds Office, Claiborne County, Tennessee, in Plat Book 3, at Page 346, and,

WHEREAS, it is now desired and the intention and purposes for the benefit and protection of the present owners or future purchasers of a lot or lots in this subdivision, and to establish a sound value for these lots, and to record these restrictions so that they may be binding and enforceable and of public record.

NOW THEREFORE, in consideration of the premises and the conditions and purposes herein set out, the undersigned, Daniel J. Tribell and Ruby Tribell, Trustees of the Daniel J. Tribell and Ruby Tribell Living Trust, bind themselves, their heirs, executors, administrators, successors and assigns, to impose the following covenants that will run with the land and/or lots in the subdivision referred to herein. These protective and restrictive covenants are as follows:

* * *

4. All homes constructed on any of the 20 lots making up this subdivided property shall have a minimum of 1,000 square feet....

* * *

14. Use of the boat launching area and adjacent parking area shall be on a “first come, first served” basis, and while the easement and launching areas are not meant for public use, property owners should be aware that this launching and parking area may be used by the present owners and owners of lots and property obtained from these developers.

(Capitalization in original; emphasis added.) The referenced plat was recorded July 31, 2002. It reflects a total of 20 lots.

On July 12, 2003, Tribell held a public auction of all lots in the subdivision. It was advertised with brochures. The brochures state prominently on their front, among other things, “Absolute Auction Norris Lake, 20 Fabulous Tracts—13 On the Water. .... TIMBERLAKE ESTATES.” (Capitalization in original.) The back of the brochure repeats some of the language on the front and adds:

Boat Ramp: Private parking and boat ramp for owners of Timberlake Estates—reasonable restrictions for your protection.

An audio recording was made of the announcement of the “terms and conditions” on the day of the auction. It is clear from the recording that a large plat of the subdivision was displayed for all potential buyers to see. It is also clear that a copy of the Declaration was provided to all potential buyers. An announcement was made that 19 lots would be offered for sale and that all deeds would be subject to the Declaration. Potential purchasers were told that, as illustrated on the plat, there would be “private parking” in the vicinity of lots 6 and 7 for the “quiet enjoyment” of the “owners of Timberlake Estates.” They were further told that lot 6 had been removed from the sale with the decision that it would “never” be sold because the developer had decided that more room was need for parking than the .221 acres reflected on the plat because the original parking area was “not enough land for these people down there.” It was announced that the developer would bear the expense of providing roads, electricity, and the proposed boat ramp reflected on the plat. Purchasers were assured that Tribell would secure a permit and construct the boat ramp when conditions allowed.

Only approximately half of the 20 lots were sold. Tribell managed to sell a few more lots by private sale. All deeds from Tribell to purchasers contained a provision stating that the “lot is sold SUBJECT to the [Declaration] filed with Plat and in Book 1126, Page 452–454, Register of Deeds Office, Tazewell, Claiborne County, Tennessee.” (Capitalization in original.) Tribell drafted the deeds.

Tribell then sold the unsold remainder of the 20 lots contained in “Phase One” plus significant other acreage to Bluegrass Estates, Inc. Bluegrass assumed the obligation of developing the property including the obligation of building the boat ramp and parking area. Tribell financed the purchase by Bluegrass and took a mortgage as security. Trouble surfaced when Bluegrass advertised a second auction scheduled for June 16, 2007, of “250 acres” of “Wooded Estate Size Tracts” with a “[p]rivate boat launch and common area for all tract buyers.” Interestingly, a map was included in the sales brochure that showed the development to be adjacent to “Timber Lake Estates” rather than being a part of it. Also, the brochure advertised that the estate-size tracts ranging in size from 9 to 21 acres could be subdivided “after 5 years.” The “Phase One” lots could not be subdivided.

The majority of those individuals who had purchased “Phase 1” lots joined as plaintiffs (“the Plaintiffs”) in an action filed on or about June 15, 2007, against Bluegrass and Tribell. That same day the Plaintiffs and Bluegrass reached an agreement settling all claims between them. The first complaint was dismissed without prejudice and the sale went forward. It was not successful. Bluegrass defaulted on its obligations under the settlement agreement as well as its obligations under the purchase agreement with Tribell. Tribell foreclosed and took all unsold property back from Bluegrass. The Plaintiffs re-filed this present action. The boat ramp and parking area has not been built.

B.

After hearing the proof we have outlined, the court announced the following as its decision:

There's no need in going any further in the lawsuit.... There's not a great factual dispute in this matter.... As far as I'm concerned, this lawsuit is a business transaction.... Gentlemen, I consider this matter a much more simple matter after reviewing all of the evidence from these lawyers. I'm looking here at three or four documents.... I'm going to use somebody of common average intelligence and sense in business experience that comes upon an advertised transaction. And handed to him is a document ... [that] says, “Norris Lake, Absolute Auction, Saturday, twenty fabulous tracts, thirteen on the water, Timberlake Estates, year-round water on Norris Lake with 850–mile shoreline. Lots 15 and 16 will sell at Absolute Auction, all other with reservation.” It has a map of this property. On the back of this document it says, “Absolute Auction,” which has legal meanings that we all lawyers understand, “on Saturday, July 12th at 11:00 a.m. The Timberlake Estates will sell twenty fabulous tracts, thirteen on the water.” And it gives an auctioneer's note, “Excellent finances, the location, year-round water on Norris Lake with 850 miles shoreline.” And it says, “Boat ramp, private parking and boat ramp for owners of Timberlake Estates. Reasonable restrictions for your protection.” Now, Timberlake Estates is described here as twenty fabulous tracts. We have another brochure, “Absolute Auction.” The same general description, prettier color. These are nice lots. There is a map of the entire area, and on the back its says, “Absolute Auction, Norris Lake, twenty family tracts, thirteen on the water. Boat ramp, private parking and boat ramp for owners of Timberlake Estates. Reasonable restrictions for your protection.”.... If you buy a lot, private parking, private boat ramp, reasonable restrictions. And then coming with the deed is a document, described as Exhibit 1, that reads like this: “The use of the launching area and adjacent parking area shall be on a first-come first-served basis.”...