Rira v. the Outback Prop. Owners' Ass'n Inc.

• Decision Date: 21 November 2014
• Docket Number: A14A1307
• Court: Georgia Court of Appeals
• Parties: S-D RIRA, LLC v. THE OUTBACK PROPERTY OWNERS' ASSOCIATION, INC.

S-D RIRA, LLC v. THE OUTBACK PROPERTY OWNERS' ASSOCIATION, INC.

A14A1307

Court of Appeals of Georgia

November 21, 2014

WHOLE COURT

NOTICE: Motions for reconsideration must be physically received in our clerk's office within ten days of the date of decision to be deemed timely filed.

Branch, Judge.

This case presents the question of whether S-D RIRA, LLC ("RIRA") is entitled to an easement over a private road located in The Outback subdivision for the purpose of accessing certain real property RIRA owns in Pickens County and whether RIRA has the right to travel over a road constructed over and across Lot 10 in The Outback to reach the private road at issue. RIRA filed a complaint against The Outback Property Owners' Association, Inc. ("the Association") asserting a statutory claim to an easement. Alternatively, RIRA claimed it had a contractual right to the declaration of a private way through the subdivision (the private way to include the road on Lot 10), based upon The Outback's Declaration of Covenants and the warranty deed transferring ownership of the subdivision's private roads to the Association. RIRA also sought a declaration that the owner of Lot 10 had the right to extend the subdivision's private road onto and over Lot 10 for the purpose of providing adjoining property owners such as RIRA with access to their property.¹

RIRA now appeals from an order of the trial court dismissing RIRA's statutory easement claim; granting judgment in favor of the Association on RIRA's contractual claim for a private way and its claim for declaratory relief; denying RIRA's motion for summary judgment on its claim for a private way and its request for declaratory relief; enjoining RIRA from using The Outback's private roads or Lot 10 to access adjoining property, including RIRA's land; and enjoining the owner of Lot 10 from using that property to access adjoining property. RIRA contends that the trial court erred in dismissing without prejudice its statutory claim for an easement for failure to plead the claim with more specificity; in entering a permanent injunction against the owner of Lot 10 in The Outback, who is not a party to this case; in finding that RIRA's contractual claim for a private way and its claim for declaratory relief were barred by both The Outback's Declaration of Covenants and by the theory of unjust enrichment; in denying RIRA's motion for summary judgment; and in granting the Association's claim for injunctive relief against RIRA. For reasons explained below, we reverse the trial court's order dismissing RIRA's statutory claim for an easement; affirm the judgment in favor of the Association on RIRA's contractual claim for a private way and its claim for declaratory relief; vacate the permanent injunction entered against RIRA; vacate the permanent injunction entered against the owner of Lot 10; and remand the case for proceedings consistent with this opinion.

The relevant facts are largely undisputed, but where any doubt existed, we have construed the record in favor of RIRA, as the non-movant on both the motion to dismiss and the motion for summary judgment. See Thompson v. Lovett, 328 Ga. App.573 (760 SE2d 246) (2014) (on a motion for summary judgment, we "construe the evidence in the light most favorable to the nonmovant") (citations omitted); Babalola v. HSBC Bank, USA, N.A., 324 Ga. App. 750, 750 (751 SE2d 545) (2013) ("[w]e review de novo a trial court's determination that a pleading fails to state a claim upon which relief can be granted, construing the pleadings in the light most favorable to the [non-movant] and with any doubts resolved in the [non-movant's] favor") (citation and punctuation omitted).

The Outback Subdivision

In 1997, Taylor Investment Corporation purchased 416.42 acres of property in Pickens County for the purpose of developing The Outback subdivision. The Outback was developed in three different phases, referred to by the developer as "units," and two separate Declarations of Covenants were filed, with each Declaration covering different units of the development. The Declaration of Covenants as to Units I and II of The Outback was filed on August 14, 1997, and these covenants apply to subdivision lots 1 through 39. The Declaration of Covenants as to Unit III of The Outback was filed on November 12, 1999 and these covenants apply to subdivision lots 40 through 97A. The separate sets of covenants are identical but for the fact that the Unit III covenants have an article addressing access to adjoining property, while the Units I and II covenants do not. The relevant article in the Unit III covenants, Article VIII, provides:

No tracts in this subdivision shall be used, nor shall any roads streets or rights of way, be placed upon such tracts for ingress and egress to adjoining property, nor shall any road in the subdivision be used to service any adjoining subdivision. This provision shall not, however, apply to the developer or its assigns. Said developer or its assigns may add adjoining property to this subdivision at any time and use its roads to access the same.

No similar language appears in the Units I and II covenants.

On March 8, 2002, Taylor Investment Corporation transferred ownership of The Outback's private roads to the Association. The warranty deed effectuating that transfer states that the Association is "to have and to hold" the roads for the exclusive use and benefit of the Association and its members, subject only to certain permitted exceptions. These permitted exceptions include both the Units I and II covenants and the Unit III covenants.

The Adjoining Property

At or about the same time that Taylor Investment Corporation purchased The Outback property, Pickens Prime Properties, LLC, a Georgia corporation owned by Bettina Longino² and Katie Lancey, purchased 80 acres of land contiguous to the land purchased by Taylor Investment.³ Sometime after purchasing this property, Pickens Prime Properties dissolved and the land was split into two parcels. Cliff and Katie Lancey received ownership of a 19.6-acre parcel, part of which adjoins The Outback. The remaining property (approximately 60 acres) was divided between six Georgia LLCs, each of which is wholly owned by The Longino Family Perpetual Trust I ("the Trust").⁴ Although each of the six LLCs holds title to approximately 10 acres of the 60-acre property, the parties refer to the entire 60-acre parcel as "the Trust Property." PPP Properties Development, LLC ("PPP"), one of the six LLCs with an interest in the Trust property, holds title to the 10-acre parcel of the Trust Property that adjoins Lot 10 in The Outback subdivision. Neither the Trust nor any of the six Trust LLCs (including PPP) are a party to this action.

In January 2006, PPP purchased Lot 10 from Jerry Goode, who had owned that property since purchasing it from Taylor Development in August 1997. One month later, the various owners of the Trust property successfully petitioned to have all 60 acres rezoned from "Agricultural" to "Rural Residential." In May 2006, PPP constructed what has been referred to alternatively as a road or a widened driveway across Lot 10. This roadway begins at the point where Lot 10 meets the subdivision road (Outback Ridge Trail) and ends at an access road located on the adjoining 10-acre parcel of Trust Property owned by PPP.⁵ On May 28, 2007, the six Trust LLCs entered into an "easement agreement" which provides, in relevant part, that the six Trust LLCs "and any other Georgia [LLC] wholly owned by [the Trust] (and no other entities)," and any successors in title "shall have a perpetual and non-exclusive easement for ingress, egress, and utilities over and across" the roadway that PPP had constructed on Lot 10 in The Outback subdivision.

RIRA is a Georgia limited liability company formed for the purpose of investing the Roth IRA funds of attorney John Longino, and, as noted previously, Longino also serves as RIRA's manager and attorney.⁶ On December 4, 2008, RIRA purchased the 19.67 acre parcel of land that had been transferred to Cliff and Katie Lancey when Pickens Prime Properties dissolved.⁷ Several days later, RIRA applied to have its property rezoned from "Agricultural" to "Rural Residential." After hearing objections from a number of homeowners in The Outback, the Pickens County Zoning Board granted this petition with two conditions. Specifically, the rezoning resolution provided that RIRA may only place two houses on the property, as opposed to the one house per 1.5 acres that is normally allowed under rural residential zoning. To build on the property the number of houses normally allowed under rural residential zoning, RIRA would have to obtain access to public roads, with such access being owned by RIRA rather than being "an easement across someone else's property."⁸

The Current Lawsuit

On March 26, 2009 RIRA filed the current lawsuit. In response, the Association filed a counterclaim for injunctive relief, seeking to permanently enjoin RIRA from driving on the subdivision's private roads or across Lot 10 to access its property, as well as a motion to dismiss RIRA's claims against it or, in the alternative, a motion for judgment on the pleadings.

After the litigation had been pending for approximately one year, but before the trial court had ruled on its motion seeking a dismissal of RIRA's claims or judgment on the pleadings, the Association filed a motion for summary judgment seeking judgment in its favor on all of RIRA's claims against the Association. RIRA filed a cross-motion for summary judgment as to its claims against the Association. Approximately four years later, on February 7, 2014, the trial court held a hearing on all motions. At the outset of that hearing, the parties acknowledged that the court was to consider the Association's motion to dismiss or, in the alternative, for judgment on the pleadings, as well as RIRA's motion for summary judgment. During that hearing, the Association also...