Gardens At Glenlakes Prop. Owners Ass'n, Inc. v. Baldwin Cnty. Sewer Serv., LLC, 1150563.
| Court | Supreme Court of Alabama |
| Citation | 225 So.3d 47 |
| Docket Number | 1150563. |
| Parties | The GARDENS AT GLENLAKES PROPERTY OWNERS ASSOCIATION, INC., et al. v. BALDWIN COUNTY SEWER SERVICE, LLC |
| Decision Date | 23 September 2016 |
225 So.3d 47
The GARDENS AT GLENLAKES PROPERTY OWNERS ASSOCIATION, INC., et al.
v.
BALDWIN COUNTY SEWER SERVICE, LLC
1150563.
Supreme Court of Alabama.
Sept. 23, 2016
Rehearing Denied Nov. 11, 2016
John A. Wenzel, C. Randall Caldwell, Jr., and Deepti Asthana of Caldwell, Wenzel & Asthana, P.C., Foley, for appellants.
Bert P. Taylor of Taylor Partners, LLC, Orange, for appellee.
MAIN, Justice.
The Gardens at Glenlakes Property Owners Association, Inc., Lake View Villas Association, Inc., Lake View Estates Property Owners Association, Inc., Glenlakes Unit One Property Owners Association, Inc., and Glenlakes Master Association, Inc. ("the Associations"), and Glenlakes Golf Club, Inc. ("the Golf Club"), appeal a judgment entered against them and in favor of Baldwin County Sewer Service, LLC ("BCSS"), by the Baldwin Circuit Court. For the reasons stated below, we reverse and remand.
I. Facts and Procedural History
In 1985, South Alabama Sewer Service, Inc. ("SASS"), and Lake View Developers,
Ltd. ("Lake View"),1 entered into an agreement pursuant to which SASS was to construct a sewer line from its waste-treatment facility to a new planned subdivision and golf course in Baldwin County, known as Lake View Estates, that was being developed by Lake View. In 1987, Lake View and SASS entered into an agreement by which SASS agreed to accept waste water from Lake View Estates for treatment. Lake View agreed that, for each lot it sold in the first two phases of the development of Lake View Estates, it would purchase a sewer tap from SASS at a specified cost and pass the cost of the tap on to each purchaser. In return, SASS agreed that it would provide sewer service to Lake View Estates and charge "regular monthly service rates to all users within Lakeview Estates that it charges to similar customers."
In 1989, Lake View filed for bankruptcy. The development and golf course, excluding lots that had already been sold, were placed in receivership. On November 8, 1991, the development and golf course were purchased by Lakeview Realty Co. ("Lakeview Realty").
On November 13, 1991, SASS and Lakeview Realty entered into a new sewer agreement ("the 1991 agreement"). The 1991 agreement provided, in part:
"RECITALS
"A. [Lakeview Realty] has entered into a contract to purchase from the Resolution Trust Corporation, as Receiver for Alamo Federal Association of Texas, a subdivision in Baldwin County, Alabama known as Lakeview Estates consisting of a golf course, approximately 180 developed lots, and vacant land for future development (‘Lakeview Estates').
"B. [SASS] has constructed a sewer line from its waste treatment facility to Lakeview Estates, and certain inner service sewer lines within the subdivision serving the developed lots have been installed.
"C. The parties desire to set out herein their agreement whereby future purchasers of the lots in Lakeview Estates will purchase sewer taps from [SASS] and [SASS] will furnish sewer service to such owners of lots in Lakeview Estates.
"NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the parties do agree as follows:
"1. Sewer Taps and Services. [SASS] agrees to furnish sewer taps and sewer service to all lots in Lakeview Estates, both those lots now developed and all lots developed in the future. [Lakeview Realty] agrees to include a provision in its real estate sales contracts requiring that all purchasers of its lots in Lakeview Estates purchase sewer taps exclusively from [SASS] upon the terms and conditions contained in this Agreement.
"....
"4. Inner Service Sewer Lines. Upon the sale and closing of the within described property from the Resolution Trust Corporation to [Lakeview Realty], all inner service sewer lines in Phase I shall be conveyed to [SASS] free and clear of all liens. Upon the completion, inspection and acceptance by [SASS] of all inner service [sewer lines] in each future development phase of Lakeview Estates, [Lakeview Realty] shall promptly convey by appropriate legal
instrument all of the inner service sewer lines within such phase to [SASS] free and clear of all liens.
"5. Waste Water. [SASS] agrees to accept waste water from Lakeview Estates for treatment at its waste treatment facility for all lots with respect to which sewer tap fees and monthly service fees have been paid to [SASS]. [SASS] shall charge regular monthly sewer serve rates to all users within Lakeview Estates that are competitive with charges made by others for similar services in the South Baldwin County vicinity. The charges for customers in Lakeview Estates shall not be more than charges for all other customers of the same class or type."
The 1991 agreement further purported to cancel and to replace all prior agreements involving SASS related to Lake View Estates, including the 1987 agreement between SASS and Lake View, and stated that "[t]his agreement shall be construed as a covenant running with the land."2 The 1991 agreement was recorded in the Baldwin County probate office. The 1991 agreement did not include a legal description of the property comprising "Lake View Estates."
In July 2003, BCSS purchased from SASS the sewer lines and sewer facilities servicing Lake View Estates. In 2004, BCSS purchased all the stock of SASS. Subsequent to BCSS's purchase of SASS and its facilities in Baldwin County, all monthly sewer fees related to Lake View Estates have been billed by and paid to BCSS.
Sometime following its acquisition of SASS's sewer system, BCSS enacted a rate increase affecting customers in Lake View Estates. In 2014, the Associations, whose members are property owners in Lake View Estates, sued BCSS in the Baldwin Circuit Court, generally asserting that BCSS had violated the sewer-service-rate provision of the 1991 agreement. The Associations contend that the rate increase effected by BCSS resulted in a rate that exceeded the rate permitted by the 1991 agreement. The Associations asserted claims of breach of contract, conversion, "willfully violat[ing] the terms" of the 1991 agreement, deprivation of owner in possession, and theft of property by deception and sought a declaratory judgment and specific performance of the 1991 agreement. The Golf Club and the City of Foley, who owns property in Lake View Estates, were granted permission to intervene in the lawsuit, with each also seeking to enforce the 1991 agreement. The Golf Club's complaint in intervention asserted claims of breach of contract and also sought a declaratory judgment and specific performance against BCSS. The City of Foley sought declaratory relief.3
On June 1, 2015, the Associations and the Golf Club filed a joint motion for a partial summary judgment on their request for a declaratory judgment. On July 9, 2015, BCSS filed a cross-motion for a summary judgment on the declaratory-judgment issue. BCSS argued
that the Associations and the Golf Club lacked standing to enforce the 1991 agreement on behalf of the individual property owners and that the 1991 agreement was unenforceable because it was, BCSS argued, "ambiguous on its face." On September 23, 2015, the trial court entered a summary judgment in favor of BCSS and denied the Associations and Golf Club's motion for a summary judgment. The court concluded that the Associations and the Golf Club lacked standing to enforce the 1991 agreement and that, even if they had standing, the 1991 agreement was unenforceable because it is "vague and ambiguous" concerning the specific property to which it applies and the rate allowed to be charged customers in Lake View Estates. In light of its ruling, the trial court ordered the parties to show cause why all remaining claims should not be dismissed. The Associations and the Golf Club conceded that, given the trial court's ruling concerning the enforceability of the 1991 agreement, all remaining claims were untenable. On October 20, 2015, the trial court entered a final judgment dismissing all remaining claims. The Associations and the Golf Club appealed.
II. Standard of Review
"We review a summary judgment de novo. Potter v. First Real Estate Co., 844 So.2d 540, 545 (Ala.2002) (citing American Liberty Ins. Co. v. AmSouth Bank, 825 So.2d 786 (Ala.2002) )....
" ‘ "We apply the same standard of review the trial court used in determining whether the evidence presented to the trial court created a genuine issue of material fact. Once
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