Boyle v. Lake Forest Property Owners Ass'n, Civ. A. No. 81-0068-H.

• Decision Date: 30 April 1982
• Docket Number: Civ. A. No. 81-0068-H.
• Citation: 538 F. Supp. 765
• Parties: Thomas E. BOYLE and Evelyn Boyle, Plaintiffs, v. LAKE FOREST PROPERTY OWNERS ASSOCIATION, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Alabama

538 F. Supp. 765

Thomas E. BOYLE and Evelyn Boyle, Plaintiffs, v. LAKE FOREST PROPERTY OWNERS ASSOCIATION, INC., et al., Defendants.

Civ. A. No. 81-0068-H.

United States District Court, S. D. Alabama, S. D.

April 30, 1982.

William S. Poole, Jr., Demopolis, Ala., for plaintiffs.

Broox G. Holmes, M. Kathleen Miller, Robert S. Edington, Mobile, Ala., for defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

HAND, Chief Judge.

1. Plaintiffs, Thomas E. Boyle and Evelyn Boyle, are residents of Metairie, Louisiana.

2. Defendant Lake Forest Property Owners Association, Inc. is an Alabama not-for-profit corporation which is incorporated in the State of Alabama and is authorized to do business in the State of Alabama with its principal place of business in Baldwin County, Alabama.

3. Defendant Lake Forest, Inc. is a corporation which is incorporated in the State of Alabama and is authorized to do business in the State of Alabama with its principal place of business in Baldwin County, Alabama.

4. Defendant Lake Forest Management Corporation is a corporation which is incorporated in the State of Alabama and is authorized to do business in the State of Alabama with its principal place of business in Baldwin County, Alabama.

5. Lake Forest, Inc. operates a resort land development project located entirely in Baldwin County, Alabama. As part of its resort land development project, Lake Forest, Inc. initiated, caused to be constructed and supervised the construction of the sewer system, water system, roads and recreational facilities, including the Country Club clubhouse, golf course, tennis courts and marina in the Lake Forest Development. Prior to February 2, 1979, Lake Forest, Inc. managed these recreational facilities and maintained the common property of the development.

6. Plaintiffs Thomas E. and Evelyn Boyle purchased real property in the Development of Defendant Lake Forest, Inc. on July 13, 1977, from Hannon S. Hairston and Mary H. Hairston.

7. The deed to said real property referenced certain restrictive covenants, recorded in the Probate Judge's Office of Baldwin County, Alabama, State of Alabama. Article XIII of these restrictive covenants provides that a purchaser of a lot or lots in the subdivision, by acceptance of a deed to the lot or the assignment of a contract or by entering into an agreement to purchase the lot whether from declarant Lake Forest, Inc. or a subsequent owner, binds himself, his heirs, personal representatives and assigns to pay all such charges and assessments as are determined and levied upon such a lot.

8. There are approximately 3600 lot owners in the Lake Forest Subdivision and every deed refers to said restrictive covenants. Of the approximately 3600 lots sold, there are approximately 800 lot owners who have residences on their lots and about 2700 lots which have no houses. Lake Forest, Inc. retains title to approximately 600 lots which have not been sold.

9. Plaintiffs learned of Lake Forest Subdivision from personal friends who are residents of said Subdivision. Prior to the purchase of their lot, Plaintiffs viewed certain of the facilities including the golf course, Yacht Club and Country Club, which are now maintained by the Lake Forest Property Owners Association.

10. Plaintiffs were aware of said restrictive covenants at the time of the purchase of their lot. Plaintiffs were advised both by their friends who resided in the subdivision and by the real estate agent who sold the lot that by purchasing the lot they would be obligated to be members of and pay dues to the Lake Forest Property Owners Association. Plaintiffs also received a letter dated June 1, 1977 from the real estate agent which noted the obligation to pay said dues.

11. In addition to Plaintiffs' deed specifically referencing said covenants, the title insurance policy on Plaintiffs' property referenced the covenants.

12. The Plaintiffs purchased the lot for investment purposes and no house or residence has ever been constructed on their lot.

13. Plaintiffs viewed the facilities of the development and believed that said facilities made the purchase of the real property in question a better investment.

14. Other owners of lots in Lake Forest development purchased their property in reliance on the continued existence of the restrictive covenants and believe that the restrictive covenants enhance the value of their property.

15. At the time the original Developer of the subdivision agreed to sell the common facilities to the Property Owners Association in December of 1978, the members of the Association were notified of this option and were informed that it was planned that the purchase price would be raised by levying a $250.00 purchase assessment against each lot.

16. Plaintiffs voted by proxy in favor of the acquisition of said facilities.

17. Approximately 2600 members of the Defendant Lake Forest Property Owners Association, Inc. paid or are paying $250.00 per lot as the purchase assessment to purchase the recreational facilities and other common areas from Diamondhead Corporation.

18. By letter dated March 29, 1979, the Plaintiff, Thomas E. Boyle, conveyed his desire to withdraw from membership in Lake Forest Property Owners Association, Inc. to Mr. Bridges, then President of Lake Forest Property Owners Association, Inc. This request was denied.

19. The Defendant Lake Forest Property Owners Association, Inc. acquired from Lake Forest, Inc. and now owns real property and facilities in Baldwin County, Alabama, consisting of all the recreational facilities at Lake Forest, including the 27-hole golf course, the Yacht and Country Clubs, the rec centers, the swim and racquet club, riding stables and lake.

20. Lake Forest Property Owners Association, Inc. purchased the above described facilities from Lake Forest, Inc. on February 2, 1979 for $1,169,200.00.

21. Effective on February 2, 1979, Lake Forest Property Owners Association, Inc. leased the exclusive use of said facilities to Lake Forest Management Corporation, a subsidiary of Club Corporation of America.

22. Also effective February 2, 1979, Lake Forest Property Owners Association, Inc. contracted for Lake Forest Management Corporation to manage and oversee the maintenance of the recreational facilities and real and personal property referred to above and to provide guard and security service. A provision of the management agreement requires the enforcement by Lake Forest Property Owners Association, Inc. of the restrictive covenants.

23. Members of the Defendant Lake Forest Property Owners Association, Inc. are allowed to use the facilities of other Club Corporation of America clubs around the United States and, also, members of other Club Corporation of America operations around the United States can use the facilities of Lake Forest Property Owners Association, Inc.

24. Lake Forest, Inc. is a wholly owned subsidiary of Purcell Company, Inc., which operates resort land developments in 8 other states. Members of Lake Forest Property Owners Association, Inc. have the same reciprocal rights and privileges with other recreational facilities of the Purcell Company.

25. Lake Forest Management Corporation collects the dues and assessments for the Defendant Lake Forest Property Owners Association, Inc.

26. The restrictive covenants contained by reference in that certain Deed from Hannon S. Hairston and Mary H. Hairston to the Plaintiffs, T. E. Boyle and Evelyn B. Boyle, and most especially Article XIII thereof, which require the payment of such dues and assessments as may be levied by the Lake Forest Property Owners Association, Inc. and which require, (with certain exceptions), membership in the Lake Forest Yacht and Country Club, are not arbitrary and capricious, are reasonably related to the property and its use, and touch and concern the property,...