Willow Lake Residential Ass'n, Inc. v. Juliano

Decision Date27 August 2010
Docket Number2081099.
Citation80 So.3d 226
PartiesWILLOW LAKE RESIDENTIAL ASSOCIATION, INC., et al. v. Carolyn JULIANO and Charles Juliano.
CourtAlabama Court of Civil Appeals

OPINION TEXT STARTS HERE

Alabama Supreme Court 1091690.

Carol H. Stewart and Scott A. Boykin of Burr & Forman LLP, Birmingham, for appellant Willow Lake Residential Association, Inc.

Michael R. Lunsford of Porterfield, Harper, Mills & Motlow, P.A., Birmingham, for appellees.

MOORE, Judge.

On March 6, 2009, the Bessemer Division of the Jefferson Circuit Court (“the trial court) entered a judgment in favor of Charles Juliano and his wife, Carolyn Juliano, in a civil action arising out of a dispute regarding a series of steps constructed by the Julianos in a common area in the Willow Lake Subdivision (“the subdivision). In that judgment, the trial court enjoined the Willow Lake Residential Association, Inc. (“the Association”), from removing the steps from the common area; awarded Charles Juliano $20,000 in damages recoverable against the Association and its codefendants, Craig Harrington, Steve Van Gilder, Curtis Guenther, Kathleen Zavatti, and Rental Managers, Inc.; and ordered the assets of the Association to be placed into receivership. From that judgment, the Association and its codefendants appeal.1

Facts and Procedural Background

The dispute between the parties began after the Julianos cleared an overgrown area of land immediately behind their recently purchased home in the subdivision and erected a series of steps leading from their property to the edge of Tom Sawyer Lake. Charles Juliano testified that, when he and his wife purchased their property, certain statements made by the prior homeowner led Juliano to believe that the Julianos would own the land leading from their home to the lake. However, both the description of the property in the deed transferring the property to the Julianos and a survey provided to the Julianos at the closing of the loan to purchase the property showed indisputably that the Julianos' property line ended well above the edge of Tom Sawyer Lake. As a result, it is undisputed that a majority of the steps were built on a common area bordering the lake.

The Julianos eventually received a letter from Kathleen Zavatti, an employee of Rental Managers, Inc., informing them that she was managing the common areas of the subdivision on behalf of the Association and that the Association maintained that the construction of the steps violated certain restrictive covenants applicable to the subdivision. Charles Juliano testified that, despite certain references in the Julianos' deed and in other documents presented to the Julianos at the closing of the loan to purchase the property, he did not realize that any restrictive covenants would apply to the Julianos' use of the common areas in the subdivision or that any violations of those restrictive covenants could be enforced by a homeowners' association. When the Julianos received Zavatti's letter, Charles Juliano met with her to discuss the matter. Following that meeting, and after obtaining a survey of the subject property, Zavatti sent the Julianos another letter giving them the option of either purchasing the common area, with the consent of the abutting landowners, or removing the steps. The Julianos did not agree to either option; 2 instead, Charles Juliano, believing that the Association was threatening to take part of the Julianos' property, retained an attorney, who demanded by correspondence that Zavatti and the Association cease harassing the Julianos.

On July 31, 2006, Charles Juliano filed a civil action against the Association and its codefendants, three of whom—Harrington, Van Gilder, and Guenther—in 2005 and 2006, acted as members of the board of directors of the Association and one of whom—Zavatti—in late 2005 and 2006, acted as the property manager for the subdivision through her employer, Rental Managers, Inc. In count one of his complaint, Juliano requested that the trial court permanently enjoin the Association from taking any action to remove the steps or to damage the Julianos' property or the area immediately behind the Julianos' property. In count two, Juliano asserted that the Association had never been properly incorporated, that its board of directors had never been properly appointed, that the board of directors had not followed certain corporate formalities, and that the board of directors had improperly collected homeowners' dues based on the misrepresentation that the Association was acting as an incorporated association. Juliano sought to enjoin “the defendants from taking any further action with regard to the assets of the Association and requested that the trial court appoint a receiver to assume control of the assets of the Association or to properly incorporate the Association. In count three, Juliano asked the trial court to declare the restrictive covenants, bylaws, and articles of incorporation of the Association to be void. In addition, in other counts of his complaint, Juliano asserted claims of unjust enrichment and quantum meruit, and he sought damages against the Association and its codefendants for trespass, slander, and fraud.

Based on the allegations in the complaint, counsel retained to defend the lawsuit investigated the history of the Association and discovered that the Association had never been properly incorporated. On August 22, 2006, the Association filed articles of incorporation in the Bessemer Division of the Jefferson Probate Court, which articles were purportedly corrected or amended on August 24, 2006. A little over a month after the articles of incorporation were filed, the Association filed an answer to Charles Juliano's complaint and a counterclaim in which Carolyn Juliano was named as a counterclaim defendant, seeking a declaration that the Julianos had erected the steps in violation of certain restrictive covenants; that the Association had the right to enforce the restrictive covenants against the Julianos and to remove the steps from the common area; and that the Association had the right, pursuant to certain restrictive covenants, to recover costs and attorney's fees incurred by it in enforcing the restrictive covenants. The codefendants also answered Juliano's complaint. The case proceeded to trial on November 17, 2008, during which the trial court allowed Juliano to amend his complaint to further allege that the defendants had interfered with his right to use and enjoy the common area. The trial court entered a judgment favorable to the Julianos on March 6, 2009. The trial court subsequently denied the Association's and its codefendants' postjudgment motions.

Incorporation and other Related Issues

In its judgment, the trial court found that in 1995 the Willow Lake Partnership (“the partnership”) filed in the Bessemer Division of the Jefferson Probate Court a document entitled “Willow Lake Residential Declaration of Covenants, Conditions, and Restrictions.” That document contemplated the formation of a nonprofit corporation to be designated as “Willow Lake Residential Association, Inc. The partnership attached articles of incorporation and bylaws for the Association to the declaration, but, the parties agree, the filing of those attachments did not comply with the statute regarding the method for proper incorporation, see Ala.Code 1975, § 10–3A–60, so the Association was not, at that time, properly incorporated.

The record shows that the partnership managed and operated the unincorporated Association from 1995 through late 1999, at which time it notified the homeowners in the subdivision that it would be turning over the management of the Association to them. A small group of homeowners, representing far less than one-half of all the homeowners in the subdivision, formed a transition committee and elected nine directors that then assumed control of the Association. It is undisputed that the election did not comply with the bylaws filed by the partnership, which called for only three directors who were to be appointed by the partnership or elected by a majority of the homeowners. Thereafter, the Association failed to hold annual meetings attended by a quorum of the homeowners in the subdivision, as required by the bylaws. The bylaws provided the board of directors authority to appoint an Architectural Review Committee (“ARC”). The trial court found that, because the board of directors had not been properly formed, the board never properly appointed an ARC.

In early 2005, the acting board of directors discovered that the Association was not listed as a corporation on the Web site for the Alabama Secretary of State. After several board members investigated the matter, the board decided not to take any action to incorporate, a decision reflected in the minutes of a meeting of the board, which read as follows: We meet all the qualifications for an Association and we do not need to be incorporated.”

Following service of Juliano's complaint, the board retained an attorney, who discovered the 1995 filing error. The attorney arranged for the filing of articles of incorporation on August 22, 2006. Those articles incorrectly identified Zavatti as a board member and contained several typographical errors. On August 24, 2006, the attorney attempted to correct those errors by filing amended articles of incorporation. The trial court found that the August 24 filing did not comply with “the requirement for filing Amended Articles of Incorporation. See Ala.Code 1975, § 10–3A–81.” For that reason, the trial court found that the Association had again failed to incorporate.

On January 8, 2007, a quorum of the homeowners in the subdivision met for the purpose of ratifying the acts performed on behalf of the Association for the preceding seven years. The homeowners voted 77 to 68 for ratification. In its judgment, the trial court considered that vote a nullity because the Association was not...

To continue reading

Request your trial
50 cases
  • Bekken v. Greystone Residential Ass'n, Inc.
    • United States
    • Alabama Court of Civil Appeals
    • January 13, 2017
    ...are agreements among various landowners regarding the use and enjoyment of their land ...." Willow Lake Residential Ass'n, Inc. v. Juliano, 80 So.3d 226, 241 (Ala. Civ. App. 2010). Actions based on promises or agreements under seal, however, are not subject to § 6–2–34(4) and (9). City of B......
  • Zucaro v. Anand Patel, Raman Patel, & Gulf Coast Mgmt. Co.
    • United States
    • U.S. District Court — Southern District of Alabama
    • September 6, 2016
    ...a reasonableness limitation.' " Gore v. White, 96 So. 3d 834, 846 n.3 (Ala. Civ. App. 2012) (quoting Willow Lake Residential Ass'n, Inc. v. Juliano, 80 So. 3d 226, 241 (Ala. Civ. App. 2010)). Where, as here, attorneys' fees and costs are provided for by promissory note, "[i]n determining th......
  • Winn–Dixie Stores, Inc. v. Big Lots Stores, Inc.
    • United States
    • U.S. District Court — Southern District of Florida
    • August 13, 2012
    ...omitted). Recording a restrictive covenant in Alabama is also a valid form of constructive notice. See Willow Lake Residential Ass'n, Inc. v. Juliano, 80 So.3d 226, 237 (Ala.Civ.App.2010) (finding an individual was “charged by law with notice of the contents of those covenants because the r......
  • In re England
    • United States
    • U.S. Bankruptcy Court — Middle District of Alabama
    • March 30, 2018
    ...law reads into every agreement allowing for the recovery of attorney's fees a reasonableness limitation." Willow Lake Residential Ass'n, Inc. v. Juliano , 80 So.3d 226, 241 (2010). Within Alabama state courts, the factors enumerated in Alabama Rule of Professional Conduct 1.5 must be consid......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT