Griggs v. Driftwood Landing, Inc.

CourtSupreme Court of Alabama
Citation620 So.2d 582
PartiesMargaret T. GRIGGS, individually and as executrix of the Estate of W. Garrett Griggs, deceased v. DRIFTWOOD LANDING, INC., et al. SUNBANK/WEST FLORIDA, N.A. v. Margaret T. GRIGGS, individually and as executrix of the Estate of W. Garrett Griggs, deceased. Roger L. QUICK, et al. v. Margaret T. GRIGGS, individually and as executrix of the Estate of W. Garrett Griggs, deceased. 1911596, 1911653 and 1911673.
Decision Date16 April 1993

Allan R. Chason of Chason & Chason, P.C., Bay Minette, for appellant/cross-appellee Margaret T. Griggs.

Julian B. Brackin and Thack H. Dyson of Brackin and Dyson, P.C., Foley, for appellee Driftwood Landing, Inc.

Louis E. Braswell of Hand, Arendall, Bedsole, Greaves & Johnston, Mobile, for appellee/cross-appellant Sunbank/West Florida, N.A.

Robert E. McDonald, Jr., Mobile, for appellee Thomas C. Adams.

Wade B. Perry, Jr. of Johnstone, Adams, Bailey, Gordon & Harris, Mobile, for appellees/cross-appellants Roger L. Quick, Charlene M. Quick, William D. Oaks, Barbara I. Oaks, Noble Payne, Thelma Payne, Paul Steadman, Albert Steadman

HORNSBY, Chief Justice.

This case involves an alleged breach of warranty of title to certain land in Baldwin County, Alabama. Based on an alleged defect in a deed description (that defect concerning a strip approximately 30 feet wide along the west boundary of the land), Driftwood Landing, Inc. ("Driftwood"), the subsequent grantee of the property in question, sought a declaratory judgment and equitable relief against Margaret Griggs, individually and as executrix of the estate and last will and testament of W. Garrett Griggs. The Griggses were joint owners of this property and conveyed it to Thomas C. Adams and Ethel C. Adams, jointly, from whom Driftwood purchased the property.

The trial court granted the relief sought by Driftwood, finding a breach of the warranty of title given in the warranty deed from the Griggses to the Adamses. The trial court also held that a proportionate reduction in the purchase price of the property

was appropriate relief for the defect. Applying this reduction to the balance of a promissory note, which the Adamses had executed in favor of the Griggses in exchange for the property and which Driftwood had assumed, the trial court held that no balance was owing on the note. Margaret Griggs appeals, individually and as executrix of the estate of W. Garrett Griggs. We affirm.

FACTUAL BACKGROUND

The dispute over the approximately 30-foot strip of the property had its origin in a deed dated April 19, 1941, from Thekla McPhaul and A.B. McPhaul to the Department of Conservation of the State of Alabama. That deed conveys to the State a strip of land 330 feet in width east of the west boundary line of Section 9, Township 9 South, Range 5 East, in Baldwin County, which is on the north shore of Cotton Bayou, near Orange Beach. That deed contains the following condition:

"The above described land is conveyed to the Grantee [State] for the purpose of a State park or State parkway and said land is to be used exclusively for such purposes. In the event that said land is not used for said purposes at any time for a period of five consecutive years, all right, title, and interest herein conveyed shall revert to the Grantor [the McPhauls]."

In September 1944, the McPhauls conveyed to Amos Garrett a separate parcel of land located east of and adjoining the land the McPhauls had conveyed to the State. The McPhauls also transferred to Garrett any reversionary interest they had in the property conveyed to the State.

By plat dated July 18, 1946, Amos Garrett dedicated "Garrett Subdivision," which included property conveyed to him by the McPhauls and adjoining the property conveyed to the State. Garrett conveyed the lots in question to Neil Lauder in 1946, who sold them to the Griggses in 1968. These conveyances described the property according to the plat map. The subdivision plat indicates that the west boundary of the Garrett Subdivision lies only 300 feet east of the west boundary of Section 9, whereas the McPhaul deed to the State indicates that the property could not be located closer than 330 feet east of the west boundary of Section 9. Therein lies the claimed defect in the title to Lot 1 of Block 1 and Lot 1 of Block 2, of Garrett Subdivision.

The evidence at trial revealed that this problem was caused by a disagreement among surveyors concerning the true location of the west line of Section 9. Two different points were used as section corners by the surveyors to describe the west section line, and, thus, the west line of the property in question. Margaret Griggs admits on appeal that an "overlap" exists between the land as described in the deed to the State and the western portion of the lots the Griggses conveyed to the Adamses. Griggs, however, invokes the reversion clause in the McPhaul deed to the State, and she claims that application of that clause cures any defect in the property description. A map showing the location of the lots and of this "overlap" is attached as an appendix.

On November 5, 1982, the Griggses conveyed the property in question to Adams by warranty deed. As consideration for the property, the Adamses paid $50,000 down and executed to the Griggses a $100,000 promissory note, which was secured by a grantor's lien on the property. When the Adamses sold the property to Driftwood on October 11, 1983, Driftwood assumed the promissory note.

When Driftwood discovered the alleged defect, it hired a surveyor to examine the west boundary. The surveyor determined that the property was "short" on the west side. Driftwood then entered into a boundary line agreement with the State to solve the dispute, so that it could receive approval of its development plans from the Baldwin County Planning Commission and could proceed with its planned development of this land. Under this agreement, Driftwood ceded a strip of land 21.03 feet wide, measured east-west, along the west boundary line. 1

Driftwood sued the Griggses on September 5, 1984, seeking equitable relief for breach of the warranty of title contained in the deed to the Adamses. Driftwood sought a declaratory judgment determining the amount due the Griggses on the promissory note. Driftwood also sought a proportionate reduction in the purchase price of the property (i.e., a reduction in the price proportionate to the amount of land lost because of the breach of warranty of title); it argued that the amount of the reduction in price should be taken as a credit on the balance of the note. Further, Driftwood sought injunctive relief to cancel the grantor's lien on the property held by the Griggses.

On the same day, the trial court entered an ex parte order granting Driftwood the temporary relief sought. The trial court's order canceled the Griggses's grantor's lien, upon Driftwood's posting of a $125,000 bond; it posted such a bond by letter of credit issued by Sunbank/West Florida, N.A.

That letter of credit eventually lapsed, and Griggs filed a counterclaim against Driftwood, alleging that it had failed to post an irrevocable letter of credit as required by the trial court's order and seeking a judgment declaring that the remaining provisions of the trial court's order did not cancel the grantor's lien held by the Griggses. Griggs also sued Sunbank, alleging that it must post a currently valid bond; Griggs also sued the Adamses, seeking a money judgment for the amount due under the promissory note.

While the litigation progressed, Driftwood constructed condominiums on the property and sold the condominium units to individual purchasers. Driftwood gave Sunbank a mortgage on the property to secure Sunbank's construction loan to Driftwood in the amount of approximately $600,000. As a result, this case involves Sunbank; AmSouth Bank, which had taken mortgages from some individual purchasers of the condominium units; and the individual condominium unit owners. These parties have cross-appealed as a precautionary measure. If this Court reverses the trial court's order, then these parties argue that they are not subject to any liability arising from the alleged defect in title. Sunbank also argues that it has no continuing liability on the letters of credit it issued on behalf of Driftwood.

From September 5, 1985, when the court entered the initial order, until January 16, 1992, the parties filed pleadings and motions and conducted discovery. During this time, Margaret Griggs, as executrix of the estate of W. Garrett Griggs, was substituted in place of W. Garrett Griggs in this action on October 31, 1990. All parties filed motions for summary judgment, and the trial court heard arguments on these motions. On January 16, 1992, the trial court granted Griggs's motion for summary judgment, holding that the grantor's lien retained by the Griggses in the deed to the Adamses remains in full force and effect. The trial court also entered a summary judgment for Sunbank, holding that it had no continuing liability on the letter of credit it had issued.

On June 22, 1992, after an ore tenus hearing on all remaining issues, the trial court entered an order holding that there had been a breach of warranty of title given in the conveyance by the Griggses to the Adamses and that the appropriate equitable relief was a reduction in the purchase price. Applying this reduction, the trial court held that Griggs had already been paid what she was due under the promissory note, and that nothing more was due on the note. The trial court, thus, held that the note had been satisfied and that the grantor's lien was, accordingly, extinguished. It is from this judgment that Griggs appeals.

Griggs raises two issues on appeal. Generally, she argues that the trial court's holding was clearly erroneous and against the great weight of authority. First, she argues that the trial court erred in failing to give effect to the reversion clause in the...

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