Willow Lake Residential Association, Inc., et al. v. Carolyn Juliano and Charles Juliano
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REL: 08/27/2010 Notice: T h i s o p i n i o n i s s u b j e c t t o f o r m a l r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e Reporter o f Decisions, A l a b a m a A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS SPECIAL TERM, 2010 2081099 Willow Lake R e s i d e n t i a l A s s o c i a t i o n , Inc., e t a l . v. Carolyn J u l i a n o and Charles J u l i a n o Appeal from J e f f e r s o n C i r c u i t Court, Bessemer D i v i s i o n (CV-06-952) MOORE, J u d g e . On M a r c h 6, 2009, t h e B e s s e m e r D i v i s i o n o f t h e J e f f e r s o n C i r c u i t Court of C h a r l e s action ("the t r i a l c o u r t " ) e n t e r e d a judgment i n f a v o r J u l i a n o and h i s w i f e , C a r o l y n J u l i a n o , arising i na c i v i l out of a dispute regarding a series of steps 2081099 constructed by the Julianos Lake S u b d i v i s i o n ("the s u b d i v i s i o n " ) . t r i a l court enjoined Inc. area; recoverable awarded against Craig Harrington, Association cleared recently removing Juliano the Association the steps $20,000 and i t s t o be p l a c e d into i n damages codefendants, receivership. and i t s codefendants and P r o c e d u r a l From appeal. that 1 Background between t h e p a r t i e s began a f t e r t h e J u l i a n o s an o v e r g r o w n purchased area home of land immediately behind i n the subdivision s e r i e s o f s t e p s l e a d i n g from t h e i r p r o p e r t y Sawyer Lake. from t h e Managers, I n c . ; and o r d e r e d t h e a s s e t s o f Facts dispute from Charles judgment, t h e A s s o c i a t i o n The judgment, t h e S t e v e Van G i l d e r , C u r t i s G u e n t h e r , K a t h l e e n Z a v a t t i , and R e n t a l the I n that i n the Willow t h e W i l l o w Lake R e s i d e n t i a l A s s o c i a t i o n , ("the A s s o c i a t i o n " ) , common i n a common a r e a their and e r e c t e d a t o t h e edge o f Tom C h a r l e s J u l i a n o t e s t i f i e d t h a t , when he a n d h i s wife purchased t h e i r property, c e r t a i n s t a t e m e n t s made b y t h e p r i o r homeowner l e d J u l i a n o t o b e l i e v e t h a t t h e J u l i a n o s w o u l d The a p p e l l a n t s t i m e l y f i l e d t h e i r n o t i c e o f a p p e a l t o t h e supreme c o u r t ; t h a t c o u r t d e t e r m i n e d t h a t t h e a p p e a l f e l l w i t h i n t h i s c o u r t ' s a p p e l l a t e j u r i s d i c t i o n and, a c c o r d i n g l y , t r a n s f e r r e d t h e case t o t h i s c o u r t . 1 2 2081099 own the land leading from t h e i r home t o t h e l a k e . both the d e s c r i p t i o n of the property the property Julianos showed well to the Julianos that i n t h e deed t r a n s f e r r i n g and a s u r v e y p r o v i d e d a t the c l o s i n g of the loan indisputably However, to the t o purchase the property the J u l i a n o s ' property above t h e edge o f Tom S a w y e r L a k e . line ended As a r e s u l t , i t is u n d i s p u t e d t h a t a m a j o r i t y o f t h e s t e p s were b u i l t on a common area bordering The the lake. Julianos eventually received a letter from K a t h l e e n Z a v a t t i , an e m p l o y e e o f R e n t a l M a n a g e r s , I n c . , i n f o r m i n g that s h e was m a n a g i n g t h e common a r e a s o f t h e s u b d i v i s i o n on behalf that them o f t h e A s s o c i a t i o n and t h a t t h e A s s o c i a t i o n the restrictive Juliano construction violated certain covenants a p p l i c a b l e t o the s u b d i v i s i o n . Charles testified Julianos' deed that, of the despite and i n o t h e r steps maintained certain references i n the documents presented to the J u l i a n o s a t the c l o s i n g of the loan t o purchase the property, he d i d n o t r e a l i z e t h a t a n y r e s t r i c t i v e covenants would apply t o t h e J u l i a n o s ' u s e o f t h e common a r e a s i n t h e s u b d i v i s i o n o r that any v i o l a t i o n s o f t h o s e r e s t r i c t i v e enforced b y a homeowners' association. 3 c o v e n a n t s c o u l d be When the Julianos 2081099 received Zavatti's discuss the matter. obtaining Julianos letter, Charles Following that a survey of the subject another purchasing letter giving t h e common a r e a , them either option; 2 instead, her to and after Z a v a t t i sent the the option of e i t h e r w i t h the consent of the a b u t t i n g Charles t h e A s s o c i a t i o n was t h r e a t e n i n g property, met w i t h meeting, property, landowners, o r removing t h e steps. to Juliano The J u l i a n o s d i d n o t a g r e e Juliano, believing that t o take part of the J u l i a n o s ' r e t a i n e d an a t t o r n e y , who demanded b y c o r r e s p o n d e n c e t h a t Z a v a t t i and the A s s o c i a t i o n cease h a r a s s i n g t h e J u l i a n o s . On J u l y 3 1 , 2006, C h a r l e s Juliano filed a civil action a g a i n s t t h e A s s o c i a t i o n a n d i t s c o d e f e n d a n t s , t h r e e o f whom -¬ Harrington, Van G i l d e r , and Guenther -- i n 2005 a n d 2006, a c t e d as members o f t h e b o a r d o f d i r e c t o r s o f t h e A s s o c i a t i o n and one o f whom -- Z a v a t t i -- i n l a t e 2005 a n d 2006, a c t e d as t h e p r o p e r t y manager f o r t h e s u b d i v i s i o n t h r o u g h h e r e m p l o y e r , R e n t a l Managers, Inc. requested that the I n c o u n t one o f h i s c o m p l a i n t , trial court permanently Juliano enjoin the The Association later withdrew the options after r e a l i z i n g t h a t i t w o u l d have t o o b t a i n t h e c o n s e n t o f e v e r y landowner i n t h e s u b d i v i s i o n i n order t o convey a p a r t o f t h e common a r e a s . 2 4 2081099 Association f r o m t a k i n g any a c t i o n t o remove t h e s t e p s damage t h e J u l i a n o s ' p r o p e r t y the Julianos' property. or t o or the area immediately behind I n c o u n t two, J u l i a n o a s s e r t e d the A s s o c i a t i o n had never been p r o p e r l y i n c o r p o r a t e d , that that i t s b o a r d o f d i r e c t o r s had never been p r o p e r l y a p p o i n t e d , t h a t t h e board of directors formalities, had certain corporate the b o a r d of d i r e c t o r s had and t h a t not followed improperly c o l l e c t e d homeowners' dues b a s e d on t h e m i s r e p r e s e n t a t i o n the Association was Juliano sought further action with and requested acting to enjoin that as an i n c o r p o r a t e d "the defendants" regard to the assets the t r i a l court that association. from taking any of the A s s o c i a t i o n appoint a receiver to assume c o n t r o l o f t h e a s s e t s o f t h e A s s o c i a t i o n o r t o p r o p e r l y incorporate the t r i a l the A s s o c i a t i o n . court to declare the r e s t r i c t i v e and articles In addition, asserted In count t h r e e , Juliano asked covenants, bylaws, o f i n c o r p o r a t i o n o f t h e A s s o c i a t i o n t o be v o i d . in claims other counts of unjust of his complaint, Juliano e n r i c h m e n t and quantum m e r u i t , and he s o u g h t damages a g a i n s t t h e A s s o c i a t i o n and i t s c o d e f e n d a n t s for trespass, slander, and fraud. 5 2081099 Based on the allegations in the complaint, counsel r e t a i n e d to defend the l a w s u i t i n v e s t i g a t e d the h i s t o r y of the A s s o c i a t i o n and d i s c o v e r e d properly filed the incorporated. articles Jefferson corrected month t h a t t h e A s s o c i a t i o n had never been On A u g u s t 22, 2006, t h e of i n c o r p o r a t i o n after i n t h e Bessemer D i v i s i o n o f Probate Court, which a r t i c l e s o r amended on A u g u s t the a r t i c l e s of Association 24, 2006. were A incorporation purportedly little were over filed, a the A s s o c i a t i o n f i l e d an answer t o C h a r l e s J u l i a n o ' s c o m p l a i n t and a counterclaim i n which counterclaim defendant, Julianos erected had restrictive Carolyn seeking the Juliano a in steps violation covenants; that the A s s o c i a t i o n the Association steps from the had the r i g h t , common pursuant November Juliano 17, 2008, during that of and to certain t o amend h i s c o m p l a i n t 6 the the certain that the restrictive f e e s i n c u r r e d by i t The c o d e f e n d a n t s a l s o The c a s e p r o c e e d e d t o t r i a l which a had the r i g h t t o area; i n e n f o r c i n g the r e s t r i c t i v e covenants. as t h e J u l i a n o s and t o c o v e n a n t s , t o r e c o v e r c o s t s and a t t o r n e y ' s answered J u l i a n o ' s c o m p l a i n t . named declaration enforce the r e s t r i c t i v e covenants against remove was trial to further court allege on allowed that the 2081099 d e f e n d a n t s had common a r e a . the i n t e r f e r e d w i t h h i s r i g h t t o use The trial court entered J u l i a n o s on M a r c h 6, denied the 2009. Association's and Incorporation and The and enjoy a judgment f a v o r a b l e trial the to court subsequently i t s codefendants' postjudgment motions. In i t s judgment, the Willow Lake entitled "Willow of "Willow of ("the the partnership") of regarding of to the The the in the J e f f e r s o n P r o b a t e C o u r t a document nonprofit of Covenants, T h a t document c o n t e m p l a t e d t h e corporation incorporation d e c l a r a t i o n , but, those attachments d i d not to be and the designated The partnership bylaws for the p a r t i e s agree, comply w i t h as the the statute t h e method f o r p r o p e r i n c o r p o r a t i o n , see A l a . Code § 10-3A-60, so properly filed Lake R e s i d e n t i a l D e c l a r a t i o n articles Association 1975, f o u n d t h a t i n 1995 Lake R e s i d e n t i a l A s s o c i a t i o n , I n c . " attached filing a Issues court C o n d i t i o n s , and R e s t r i c t i o n s . " formation Related trial Partnership Bessemer D i v i s i o n other t h e A s s o c i a t i o n was not, at that time, incorporated. record shows that operated the u n i n c o r p o r a t e d the partnership A s s o c i a t i o n f r o m 1995 7 managed and through l a t e 2081099 1999, at which subdivision the time that the notified the i t w o u l d be turning to Association representing i t A them. homeowners over the small group formed a transition of i s undisputed b y l a w s f i l e d by directors elected who by quorum o f the to homeowners i n committee failed the of to The hold bylaws to ("ARC"). The trial directors had not appoint been a p p o i n t e d an Web site Association f o r the by the Association. found t h a t , properly as by required a by of directors Review Committee because the formed, or the attended board Architectural three Thereafter, meetings the the partnership subdivision, provided court elected comply w i t h homeowners. annual an the board board of never ARC. I n e a r l y 2005, t h e the the and which c a l l e d f o r only appointed homeowners i n t h e authority that e l e c t i o n d i d not be majority bylaws. properly the the p a r t n e r s h i p , were a Association that of homeowners, n i n e d i r e c t o r s t h a t t h e n assumed c o n t r o l o f t h e It the management f a r l e s s than o n e - h a l f of a l l the subdivision, in was a c t i n g b o a r d of d i r e c t o r s not listed Alabama S e c r e t a r y as of a corporation State. b o a r d members i n v e s t i g a t e d t h e m a t t e r , t h e 8 discovered After on the several board decided not 2081099 t o t a k e any a c t i o n to incorporate, a d e c i s i o n r e f l e c t e d i n the m i n u t e s o f a m e e t i n g o f t h e b o a r d , w h i c h r e a d as f o l l o w s : meet a l l t h e n e e d t o be qualifications The an service attorney, attorney of Juliano's who arranged Zavatti typographical for as the the do not 2006. On incorporation. The August trial board error. of articles Those a r t i c l e s a b o a r d member and errors. the filing 1995 filing 24, a t t e m p t e d t o c o r r e c t t h o s e e r r o r s by of we complaint, discovered i n c o r p o r a t i o n on A u g u s t 22, identified and incorporated." Following retained f o r an A s s o c i a t i o n "We court incorrectly contained 2006, filing the amended found t h a t of the several attorney articles August 24 f i l i n g d i d n o t c o m p l y w i t h " t h e r e q u i r e m e n t f o r f i l i n g Amended Articles of I n c o r p o r a t i o n . See For that reason, court had again f a i l e d to On January subdivision met the 8, trial A l a . Code 1975, found that § 10-3A-81." the Association incorporate. 2007, for the a quorum o f purpose of the homeowners i n ratifying the the acts p e r f o r m e d on b e h a l f o f t h e A s s o c i a t i o n f o r t h e p r e c e d i n g s e v e n years. The homeowners v o t e d 77 9 to 68 for r a t i f i c a t i o n . In 2081099 its judgment, t h e t r i a l court considered that vote a n u l l i t y b e c a u s e t h e A s s o c i a t i o n was n o t i n c o r p o r a t e d The trial court declared Association had never Association had not acted court had formally a t the time. i n i t s judgment incorporated a s a de f a c t o that the and t h a t t h e corporation. The c o n c l u d e d t h a t t h e moneys c o l l e c t e d b y t h e A s s o c i a t i o n been i n t e n d e d been c r e a t e d . f o r a n o n p r o f i t c o r p o r a t i o n t h a t had never The t r i a l court therefore appointed a receiver t o c o l l e c t t h e a s s e t s o f t h e A s s o c i a t i o n u n t i l t h e homeowners i n t h e s u b d i v i s i o n v a l i d l y formed a c o r p o r a t i o n " i n accordance with Alabama point the law and A l a . receiver corporation. the would The t r i a l 1975, § 10-3A-81," a t w h i c h transfer of t h e common partnership not areas t o "Willow pass title the assets to that court f u r t h e r concluded t h a t , because A s s o c i a t i o n had n o t been p r o p e r l y deed did Code of incorporated, the subdivision from Lake R e s i d e n t i a l A s s o c i a t i o n , to that land to the a 2000 the Inc.," Association. A d d i t i o n a l l y , t h e t r i a l c o u r t determined t h a t the A s s o c i a t i o n , as an u n i n c o r p o r a t e d common areas, entity with h a d no standing covenants. 10 no o w n e r s h i p r i g h t s t o enforce t o the the r e s t r i c t i v e 2081099 The trial Association court argues that, a c t i n g as a c o r p o r a t e entity. reasons, the t h a t t h e A s s o c i a t i o n was erred i n concluding for several not However, we need o n l y the A s s o c i a t i o n ' s argument r e g a r d i n g i t s f o r m a l The and evidence testimony i n the admitted record, at a incorporation. which c o n s i s t s hearing on address the of exhibits Association's m o t i o n f o r a p r e l i m i n a r y i n j u n c t i o n and e x h i b i t s and testimony admitted during 65(a) ( 2 ) , Ala. R. Civ. P. the November 2008 t r i a l , (Providing for see automatic Rule incorporation admissible evidence from p r e l i m i n a r y - i n j u n c t i o n h e a r i n g record trial of on the merits of petition for of into permanent i n j u n c t i o n ) , shows i n d i s p u t a b l y t h a t t h e A s s o c i a t i o n f i l e d i t s a r t i c l e s o f i n c o r p o r a t i o n on A u g u s t 22, 2006. made the no articles finding of that the incorporation filing was of irregular The trial court 22, 2006, August i n any way, and have n o t i d e n t i f i e d any i m p r o p r i e t y w i t h r e g a r d t o t h a t filing t h a t would p r e v e n t the i n c o r p o r a t i o n of the A s s o c i a t i o n . homeowner who b o u g h t a home i n t h e a nonprofit and Section restrictive agreed, covenants, pursuant to 11 to Each s u b d i v i s i o n consented become members o f t h e A s s o c i a t i o n as further we to corporation 12.18 of the 2081099 " o t h e r w i s e do o r make, o r c a u s e t o be done and made, any and a l l a g r e e m e n t s , ... a c t s o r t h i n g s ... w h i c h may be r e a s o n a b l y r e q u e s t e d by t h e A s s o c i a t i o n ... f o r purposes of or i n c o n n e c t i o n w i t h c l a r i f y i n g , amending or otherwise c o n s u m m a t i n g any of the t r a n s a c t i o n s and m a t t e r s h e r e i n . " The homeowners t h u s c o n s e n t e d t o t h e f i l i n g o f t h e a r t i c l e s incorporation conclusion to incorporated 63 on be August 22, drawn is on A u g u s t 22, 2006. that 2006. Hence, the the only legal Association properly See A l a . Code 1975, § 10-3A- ("Upon t h e f i l i n g o f t h e a r t i c l e s o f i n c o r p o r a t i o n w i t h probate judge, the The trial corporate court of existence concluded that shall the the begin."). Association had not p r o p e r l y i n c o r p o r a t e d b e c a u s e i t d i d n o t c o m p l y w i t h A l a . Code 1975, § 10-3A-81, when i t a t t e m p t e d t o amend i t s a r t i c l e s incorporation 3 Section on August 10-3A-81 24, 2006. 3 Section 10-3A-81 provides: "(a) Amendments t o t h e a r t i c l e s o f i n c o r p o r a t i o n s h a l l be made i n t h e f o l l o w i n g manner: "(1) I f t h e r e a r e members e n t i t l e d t o vote t h e r e o n , the board of d i r e c t o r s s h a l l adopt a resolution setting forth the p r o p o s e d amendment and d i r e c t i n g t h a t i t be s u b m i t t e d t o a v o t e a t a m e e t i n g o f members entitled t o v o t e t h e r e o n , w h i c h may be e i t h e r an a n n u a l o r a s p e c i a l m e e t i n g . W r i t t e n n o t i c e s e t t i n g f o r t h the proposed amendment o r a summary o f t h e c h a n g e s t o be 12 of deals 2081099 solely with the proper incorporation; for filing of that section original noncompliance procedure f o r amending articles does n o t a p p l y t o t h e p r o c e d u r e articles of i n c o r p o r a t i o n . Thus, t h e amendments t o t h e a r t i c l e s incorporation trial any w i t h § 10-3A-81 w o u l d a f f e c t o n l y t h e v a l i d i t y of i n c o r p o r a t i o n A u g u s t 24, 2006, a n d n o t t h e v a l i d i t y o f t h e o r i g i n a l of of filed c o u r t e r r e d when on A u g u s t 22, 2 0 0 6 . i t concluded 4 filed on articles Therefore, the that the A s s o c i a t i o n ' s e f f e c t e d t h e r e b y s h a l l be g i v e n t o e a c h member e n t i t l e d t o v o t e a t s u c h meeting w i t h i n t h e t i m e a n d i n t h e manner p r o v i d e d in t h i s chapter f o r the g i v i n g of n o t i c e of m e e t i n g s o f members. The p r o p o s e d amendment s h a l l be a d o p t e d upon r e c e i v i n g a t l e a s t t w o - t h i r d s o f t h e v o t e s e n t i t l e d t o be c a s t by members p r e s e n t o r r e p r e s e n t e d b y p r o x y at such meeting. " ( 2 ) I f t h e r e a r e no members, o r no members entitled to vote thereon, an amendment s h a l l be a d o p t e d a t a m e e t i n g o f t h e b o a r d o f d i r e c t o r s upon r e c e i v i n g t h e vote of a m a j o r i t y of the d i r e c t o r s i n office. "(b) Any number o f amendments may be s u b m i t t e d and v o t e d upon a t any one m e e t i n g . " F o r t h a t r e a s o n , we f i n d no n e e d t o a d d r e s s t h e p r o p r i e t y o f t h e t r i a l c o u r t ' s f i n d i n g t h a t t h e A s s o c i a t i o n ' s A u g u s t 24, 2006, f i l i n g d i d n o t c o m p l y w i t h § 10-3A-81. 4 13 2081099 alleged f a i l u r e to s a t i s f y § 10-3A-81 r e n d e r e d t h e A u g u s t 22, 2006, a r t i c l e s of i n c o r p o r a t i o n That l e d the t r i a l that error the Association nonprofit had corporation; improperly held by the that an Association restrictive court not been to erroneously properly i t s assets, declare formed which unincorporated homeowners, s h o u l d be p l a c e d that ineffective. were as a being association of i n t h e hands o f a r e c e i v e r ; and lacked standing to enforce the covenants. We c o r r e c t t h a t f i r s t e r r o r b y r e v e r s i n g t h e j u d g m e n t o f the t r i a l had c o u r t i n s o f a r as i t d e t e r m i n e d t h a t t h e A s s o c i a t i o n not p r o p e r l y i n c o r p o r a t e d instruction reflect that f o r the t r i a l and r e m a n d i n g t h e c a u s e w i t h court the A s s o c i a t i o n to revise had properly an i t s judgment to incorporated on A u g u s t 22, 2006, and t o deny J u l i a n o ' s r e q u e s t f o r a j u d g m e n t d e c l a r i n g t h a t t h e a r t i c l e s o f i n c o r p o r a t i o n and b y l a w s o f t h e A s s o c i a t i o n are void. As f o r the receiver error, managed t h e A s s o c i a t i o n Association 2009. second obtained Following a stay the record from March o f t h e judgment shows that the 2009 until the on A u g u s t 28, the entry of the stay, the r e c e i v e r 14 returned 2081099 the assets of the Association to i t s acting board of d i r e c t o r s , a l l o f whom h a d b e e n d u l y e l e c t e d b y a m a j o r i t y o f t h e homeowners i n t h e s u b d i v i s i o n . that i t incurred fees payable The A s s o c i a t i o n p o i n t s o u t to the receiver during h i s i n t e r i m management, b u t t h e A s s o c i a t i o n does n o t s p e c i f i c a l l y argue t h a t solely i t i s entitled that reversed t o recover those fees. the receiver t h e judgment a p p o i n t i n g and t h a t t h e a s s e t s I t argues should of the A s s o c i a t i o n should u n d e r t h e management o f t h e b o a r d o f d i r e c t o r s . issue remains viable, i n that a failure to be remain Because t h e reverse the j u d g m e n t as t o t h i s i s s u e w o u l d e n a b l e t h e t r i a l c o u r t t o l i f t the stay and r e t u r n we receiver, the assets t h e judgment o f t h e t r i a l this issue that reverse portion of the A s s o c i a t i o n a n d remand t h e c a u s e w i t h of i t s judgment to the court as t o i n s t r u c t i o n s to vacate placing the assets of the Association into receivership. The third error A s s o c i a t i o n to enforce like jurisdiction, relates to the standing the r e s t r i c t i v e covenants. i s n e c e s s a r y f o r any v a l i d legal of "Standing, action." Doremus v . B u s i n e s s C o u n c i l o f A l a b a m a W o r k e r s ' Comp. Insurers 252, Fund, 686 So. 2d 15 253 ( A l a . 1996) the Self- (emphasis 2081099 added). be A p e r s o n o r e n t i t y must have s t a n d i n g a proper party" to a l a w s u i t . standing real, to tangible lawsuit as protected So. assert 2d that the legal evidenced right. 1025, a claim an 1027-28 Association person i n the injury S t a t e v. P r o p e r t y or in a t 2018 has did standing a of to legally a the Rainbow D r i v e , trial has matter fact The have entity subject ( A l a . 1999). not "[t]o A p e r s o n or e n t i t y i f that interest by Id. i n order court to 740 reasoned enforce r e s t r i c t i v e covenants because the r e s t r i c t i v e covenants the place t h a t power i n t h e A s s o c i a t i o n as a n o n p r o f i t c o r p o r a t i o n . See g e n e r a l l y Bon A v e n t u r e , L.L.C. v. C r a i g Dyas, L.L.C., 3 So. 3d 859, may be right to 863-64 b a s e d on enforce (Ala. 2008) (recognizing language of r e s t r i c t i v e c o v e n a n t s by filing standing covenants g r a n t i n g suit). f o r m a l l y became a n o n p r o f i t that However, t h e corporation on Association A u g u s t 22, 2006. 5 I n i t s j u d g m e n t , t h e t r i a l c o u r t n o t e d t h a t , i n two c o l l a t e r a l actions f i l e d i n Jefferson C i r c u i t Court, the A s s o c i a t i o n had d e n i e d t h a t i t had e x i s t e d as a c o r p o r a t i o n b e f o r e A u g u s t 22, 2006, and had o b t a i n e d a summary j u d g m e n t i n b o t h c a s e s b a s e d on t h a t r e p r e s e n t a t i o n . T h a t argument i n no way c o n f l i c t s w i t h t h e a r g u m e n t made by t h e A s s o c i a t i o n i n t h i s c a s e t h a t i t became a c o r p o r a t i o n on A u g u s t 22, 2006. Hence, t h e d o c t r i n e o f j u d i c i a l e s t o p p e l does n o t p r e v e n t t h e A s s o c i a t i o n from a s s e r t i n g s t a n d i n g on t h e b a s i s o f i t s on 5 A ^ ^ ^ ^ ^ ^ ^ - ^ - 1 - A 7-\, , -, ^ 4- oo incorporation on A u g u s t 22, "'"applies to preclude a party 16 o n n mv,4- ^ ^ ^ 4--.^-; v., ^ 2006. That d o c t r i n e only from assuming a p o s i t i o n i n a 2081099 At that point, the Association powers c o n t a i n e d date, i n the r e s t r i c t i v e the Association enforce legal action t o enforce covenants. had not taken the r e s t r i c t i v e October assumed a l l t h e e n f o r c e m e n t covenants. of i t s counterclaim. the (holding that standing filing therefore of counterclaim Because t h e time, 957 So. 2d 1096, 1102 (Ala. i s d e t e r m i n e d as o f t h e d a t e o f first asserting legal right). We t h e judgment o f t h e t r i a l c o u r t i n s o f a r as i t determined that the A s s o c i a t i o n lacked standing t o enforce the reverse first t h e r e s t r i c t i v e c o v e n a n t s . See Town E l m o r e v . Town o f C o o s a d a , 2006) to covenants occurred i n A s s o c i a t i o n h a d assumed i t s e n f o r c e m e n t p o w e r s b y t h a t i t had s t a n d i n g t o enforce that action The A s s o c i a t i o n ' s the r e s t r i c t i v e 2006, when i t f i l e d any l e g a l Before restrictive covenants, a n d we remand t h e cause with l e g a l p r o c e e d i n g i n c o n s i s t e n t w i t h one p r e v i o u s l y a s s e r t e d . " ' " Ex p a r t e F i r s t A l a b a m a Bank, 883 So. 2d 1236, 1241 ( A l a . 2003) ( q u o t i n g J i n r i g h t v . P a u l k , 758 So. 2d 553, 555 ( A l a . 2 0 0 0 ) , q u o t i n g i n t u r n Selma F o u n d r y & S u p p l y Co. v. P e o p l e s Bank & T r u s t Co., 598 So. 2d 844, 846 ( A l a . 1 9 9 2 ) , q u o t i n g i n t u r n O n e i d a M o t o r F r e i g h t , I n c . v. U n i t e d J e r s e y Bank, 848 F.2d 414 (3d C i r . 1988)) . 17 2081099 instructions that the t r i a l judgment c o n c l u d i n g The should that the Association lacked Association reverse court vacate that p o r t i o n of i t s also asserts on a p p e a l t h e judgment o f t h e t r i a l that court d e c l a r e d that the A s s o c i a t i o n never acquired standing. this 6 court i n s o f a r as i t ownership of the common a r e a s p u r s u a n t t o t h e 2000 d e e d f r o m t h e p a r t n e r s h i p . We n o t e t h a t t h e p a r t i e s l i t i g a t e d t h e i s s u e o f o w n e r s h i p o f t h e common a r e a s s o l e l y f o r t h e p u r p o s e o f p r o v i n g w h e t h e r t h e A s s o c i a t i o n had standing t o enforce Had the t r i a l court properly the r e s t r i c t i v e covenants. ruled that t h e A s s o c i a t i o n had s t a n d i n g b a s e d on i t s A u g u s t 22, 2006, i n c o r p o r a t i o n , i t w o u l d have h a d no n e e d t o a d d r e s s t h e o w n e r s h i p i s s u e . r e v e r s a l o f t h e judgment i n r e g a r d Thus, o u r to the incorporation issue r e n d e r s t h e f i n d i n g s o f t h e t r i a l c o u r t on t h e o w n e r s h i p i s s u e to be g r a t i s dictum. See P l a n t e r s ' & Merchants' Bank o f M o b i l e v . W a l k e r , 7 A l a . 926, 944 ( 1 8 4 5 ) ( " ' A n o p i n i o n g i v e n i n C o u r t ' ... , ' i f n o t n e c e s s a r y t o t h e j u d g m e n t g i v e n o f r e c o r d , The A s s o c i a t i o n a r g u e d a l t e r n a t i v e l y t h a t i t a l s o h a d s t a n d i n g b e c a u s e i t o p e r a t e d as a de f a c t o c o r p o r a t i o n b e f o r e A u g u s t 22, 2006, t h a t t h e J u l i a n o s were e s t o p p e d t o deny i t s corporate e x i s t e n c e , a n d t h a t i t h a d a c t e d v a l i d l y as an unincorporated association. B e c a u s e we d e c i d e t h a t t h e A s s o c i a t i o n h a d s t a n d i n g a s a de j u r e c o r p o r a t i o n , we n e e d n o t address those i s s u e s . 6 18 2081099 ... i s no j u d i c i a l (quoting dictum Ram o p i n i o n , no more t h a n a g r a t i s on L e g a l i s of no Judgment, legal force p. 3 7 ) ) . dictum.'" Although and e f f e c t , gratis s e e Ex S m a l l w o o d , 811 So. 2d 537 ( A l a . 2 0 0 1 ) , a n d a l t h o u g h parte the t r i a l c o u r t ' s j u d g m e n t h o l d i n g t h a t t h e A s s o c i a t i o n does n o t own t h e common areas is not binding, in order to avoid any m i s a p p l i c a t i o n o f t h e l a n g u a g e i n t h e j u d g m e n t , we b e l i e v e t h e a p p r o p r i a t e remedy i s t o r e v e r s e t h e j u d g m e n t as t o t h i s i s s u e and t o remand t h e c a u s e w i t h i n s t r u c t i o n s f o r t h e t r i a l to vacate that portion o w n e r s h i p o f t h e common Violation In i t s judgment, o f i t s judgment relating to the areas. of R e s t r i c t i v e the t r i a l Covenants court concluded that the " s t e p s do n o t v i o l a t e a n y r e s t r i c t i o n i n t h e C o v e n a n t s . " Association reaching argues that that to be a b u f f e r the t r i a l conclusion constructed the steps court because, court i t says, i n a common a r e a zone, w h i c h clearly erred i n the Julianos s p e c i f i c a l l y intended c o n s t r u c t i o n breached language o f s e v e r a l r e s t r i c t i v e covenants. 19 The the p l a i n 2081099 The s e c t i o n o f t h e r e s t r i c t i v e to t h e s t e p s i s § 3.05. 7 S e c t i o n 3.05, i n p a r t , grants t o "the Developer, respective Common c o v e n a n t s most a p p l i c a b l e t h e ARC, t h e A s s o c i a t i o n a n d t h e i r ... r e p r e s e n t a t i v e s ... [ t h e r i g h t ] Areas specifically f o r t h e purpose of ... t o access the (ii) installing, m a i n t a i n i n g , r e p a i r i n g a n d r e p l a c i n g a n y o t h e r Improvements t o t h e P r o p e r t y o r t o t h e Common A r e a s a n d ( i i i ) d o i n g a l l o t h e r things reasonably necessary and proper in connection therewith." Restrictive the intent restriction Heisler, covenants a r e t o be c o n s t r u e d of the parties i n light and circumstances according to o f t h e terms known t o t h e p a r t i e s . 439 So. 2 d 4, 5-6 ( A l a . 1983) . of the Hines v. I f "there i s no i n c o n s i s t e n c y o r ambiguity w i t h i n a r e s t r i c t i v e covenant, t h e clear and p l a i n language injunctive relief." (Ala. 1997). covenant o f t h e covenant Carpenter v. D a v i s , i s e n f o r c e a b l e by 688 So. 2d 256, 258 The p l a i n l a n g u a g e o f t h e f o r e g o i n g grants only t o the developer, restrictive t h e ARC, a n d t h e The Association points t o other sections of the r e s t r i c t i v e c o v e n a n t s a r g u a b l y a p p l i c a b l e t o t h e s t e p s , b u t we c o n c l u d e t h a t t h e t r i a l c o u r t r e a s o n a b l y c o u l d have d e t e r m i n e d t h a t those s e c t i o n s d i d not apply. 7 20 2081099 A s s o c i a t i o n t h e r i g h t t o i n s t a l l i m p r o v e m e n t s on common a r e a s . Section 3.05 does n o t a u t h o r i z e unilaterally The homeowner t o c o n s t r u c t an i m p r o v e m e n t on a common term restrictive any i n d i v i d u a l "improvement" i s defined in § area. 1.16 of the c o v e n a n t s a s "any b u i l d i n g , s t r u c t u r e o r d e v i c e constructed, erected, or placed upon a n y L o t o r Common Area w h i c h i n a n y way a f f e c t s t h e e x t e r i o r a p p e a r a n c e o f a n y L o t , Dwelling, o r Common A r e a . " I t c a n n o t be d i s p u t e d that the s t e p s c o n s t i t u t e an i m p r o v e m e n t w i t h i n t h e m e a n i n g o f § 1.16. The evidence shows w i t h o u t dispute that a majority s t e p s e x t e n d i n t o t h e common a r e a s u r r o u n d i n g Charles the Juliano admitted approval evidence, of i t i s clear that From undisputed of the steps The t r i a l i t s judgment, Waiver court the t r i a l Issue court also found enforcement o f t h e Covenants has been w a i v e d . " trial without otherwise. The In that the construction v i o l a t e d § 3.05 o f t h e r e s t r i c t i v e c o v e n a n t s . erred i n finding Tom Sawyer L a k e . t h a t he h a d t h e s t e p s b u i l t the Association. of the court d i d not s p e c i f y i t s reasons that "the Although the f o r concluding that the A s s o c i a t i o n had waived t h e enforcement o f t h e r e s t r i c t i v e 21 2081099 covenants, i n i t s f i n d i n g s of Association had failed fact to d e l i v e r covenants to the J u l i a n o s when t h e the that subdivision, stand around Julianos despite the of the The the covenants open and new a copy of and that during no the ordinarily management o c c u r r i n g due as to around the construction allowed of the to the steps construction. Association's residential- the part of in restrictive an the time the into informed change a restrictive been had provided homeowners the f i r s t moved had one noted that the Julianos structures shows t h a t However, their property, court obvious nature of the company to package. lake, violation evidence management other the introductory residential Julianos purchased no r e s t r i c t i v e c o v e n a n t s were d e l i v e r e d t o the Julianos. R e g a r d l e s s of the its self-imposed restrictive the of failure custom of d e l i v e r i n g c o v e n a n t s t o new J u l i a n o s were c h a r g e d by those of the A s s o c i a t i o n t o covenants because r e c o r d e d i n the a p p r o p r i a t e i n the J u l i a n o s ' deed. an a c t u a l copy of homeowners i n t h e restrictive contents covenants p r o b a t e c o u r t and were P u r s u a n t t o A l a . Code 1975, 22 the subdivision, law w i t h n o t i c e o f t h e the fulfill were referenced § 35-4-63, 2081099 that recording conveyance or Homeowners court "operates that subdivision a homeowner by covenants i s charged with (purchaser of In 962 So. 2d 793 burdened also Callahan of the contents instrument Ass'n, held as n o t i c e Ex parte ( A l a . 2007), who purchases properly Smokerise o u r supreme a recorded knowledge o f t h o s e c o v e n a n t s . See v . W e i l a n d , 291 A l a . 183, 279 So. 2d 451 (1973) restrictive compliance lot in a restrictive who h a d i n h i s h a n d t h e deeds r e f l e c t i n g covenants). of such existence c o v e n a n t s was deemed t o know, a n d a g r e e t o , Thus, with the A s s o c i a t i o n the restrictive could n o t have covenants by waived failing to d e l i v e r a copy o f t h o s e covenants t o t h e J u l i a n o s b e f o r e t h e construction of the steps. F o r much t h e same r e a s o n , t h e A s s o c i a t i o n c o u l d n o t have w a i v e d c o m p l i a n c e w i t h t h e r e s t r i c t i v e c o v e n a n t s by f a i l i n g t o notify the the Julianos steps. notice 8 of the v i o l a t i o n during construction of The J u l i a n o s h a d a l r e a d y b e e n g i v e n of the v i o l a t i o n due t o t h e o p e r a t i o n constructive o f § 35-4-63; We n o t e t h a t t h e e v i d e n c e i s i n c o n f l i c t as t o w h e t h e r t h e J u l i a n o s were p r o v i d e d some n o t i c e d u r i n g c o n s t r u c t i o n o f the steps t h a t the c o n s t r u c t i o n v i o l a t e d the r e s t r i c t i v e c o v e n a n t s , b u t we assume t h e t r i a l court resolved that c o n f l i c t favorably to the Julianos. 8 23 2081099 any a d d i t i o n a l a c t u a l n o t i c e w o u l d have b e e n o n l y in nature. The e v i d e n c e i n t h e r e c o r d shows t h a t c e r t a i n s t r u c t u r e s were a l l o w e d l a k e and Sawyer cumulative to stand t h a t one Lake. Association w i t h i n the homeowner had Those waived bare the common a r e a s u r r o u n d i n g l a i d steps facts right do to not restrictive enforce any covenants specifically covenant or r e s t r i c t i o n t o t h e edge o f Tom e s t a b l i s h that the enforce c o v e n a n t s a g a i n s t the J u l i a n o s , however. the restrictive S e c t i o n 12.19 of the failure to set f o r t h herein s h a l l in states: "The no e v e n t be deemed a w a i v e r o f t h e r i g h t h e r e a f t e r t o such covenant or r e s t r i c t i o n . " general Alabama law that the act as a waiver as to enforce That language c o i n c i d e s acquiescence a s s o c i a t i o n as t o one v i o l a t i o n not of a ( A l a . 1 9 7 9 ) ; and M o r r i s o n C i v . App. the 1998). Association restrictive with homeowners' o f a r e s t r i c t i v e c o v e n a n t does other or future violations. D a u p h i n I s l a n d P r o p . Owners A s s ' n v. K u p p e r s m i t h , 371 31 the v. B o u t w e l l , 717 So. See So. 2d 427 2d (Ala. Thus, a s s u m i n g t h a t t h e J u l i a n o s p r o v e d t h a t had allowed prior violations of the c o v e n a n t s b a s e d on t h e e v i d e n c e a b o v e , t h a t p r o o f d i d n o t e s t a b l i s h t h a t t h e A s s o c i a t i o n had w a i v e d i t s r i g h t t o 24 2081099 enforce trial the restrictive covenants a g a i n s t the c o u r t e r r e d i n f i n d i n g t h a t t h e A s s o c i a t i o n had compliance w i t h the restrictive The In its judgment, the steps subdivision property and developer's latter finding, general no waived Issue trial court found that a c t u a l l y enhanced the v a l u e t h a t the scheme evidence of in development. the of sustains the f o r s t e p s t o be laid line. The to the l a k e t o a l l t h e homeowners t h r o u g h a r e l a t i v e l y lake. The restrictive behind the common a r e a the Julianos' property e v i d e n c e shows t h a t t h e p a r t n e r s h i p g r a n t e d area at the opposite, Julianos, in direct covenants more s h a l l o w , violation preventing the to record As i n the recreational the s t e p s were c o n t e m p l a t e d i n c o n c l u s i o n t h a t the p a r t n e r s h i p i n t e n d e d immediately The covenants. Benefit c o n s t r u c t i o n of the the Julianos. the of the end access level of the developer's construction of i m p r o v e m e n t s a r o u n d t h e l a k e , c o n s t r u c t e d t h e s t e p s on a other steep d e c l i n e , b a s i c a l l y a c c e s s i b l e o n l y t o them and t h e i r i m m e d i a t e neighbors, w h i c h l e d i n t o t h e deep end bottomed w i t h s h a r p and uneven r o c k s . 25 of the l a k e , which The finding that was the 2081099 construction of the steps complied g e n e r a l scheme o f d e v e l o p m e n t i s clearly As t o t h e f o r m e r f i n d i n g s t e p s a c t u a l l y enhanced of property. The the the developer's erroneous. 9 t h a t the c o n s t r u c t i o n of the the value of the s u b d i v i s i o n r e c o r d c o n t a i n s no c o m p e t e n t construction with -- the e v i d e n c e as t o t h e e f f e c t o f t h e s t e p s on the Association v a l u e of maintained the subdivision throughout p r o c e e d i n g s t h a t any v i o l a t i o n o f a r e s t r i c t i v e the covenant, i f a l l o w e d o v e r i t s o b j e c t i o n , n e c e s s a r i l y d i l u t e s t h e power o f I n i t s f i n a l judgment t h e t r i a l c o u r t d i d n o t e x p l a i n why the s t e p s s h o u l d remain s i m p l y because they c o m p l i e d w i t h "the g e n e r a l scheme o f d e v e l o p m e n t . " That phrase appears i n W r i g h t v. C y p r e s s S h o r e s D e v e l o p m e n t Co., 413 So. 2d 1115 ( A l a . 1 9 8 2 ) , i n w h i c h t h e supreme c o u r t h e l d t h a t a d e v e l o p e r who has r e s e r v e d t h e r i g h t i n r e s t r i c t i v e covenants to u n i l a t e r a l l y amend o r a n n u l t h o s e r e s t r i c t i v e c o v e n a n t s may do so as l o n g as t h e d e v e l o p e r e x e r c i s e s t h a t r i g h t " i n a r e a s o n a b l e manner c o n s i s t e n t w i t h [ t h e ] g e n e r a l scheme o r p l a n of development" of the s u b d i v i s i o n . 413 So. 2d a t 1124. The supreme c o u r t a d o p t e d t h a t r u l e i n o r d e r t o p r o t e c t t h e r e a s o n a b l e e x p e c t a t i o n s o f homeowners who had purchased p r o p e r t y i n a s u b d i v i s i o n s u b j e c t to the o r i g i n a l r e s t r i c t i v e c o v e n a n t s f r o m a r b i t r a r y c h a n g e s made by t h e d e v e l o p e r who m a i n t a i n e d u n i l a t e r a l c o n t r o l over those covenants. T h i s case involves not an amendment t o t h e o r i g i n a l restrictive c o v e n a n t s by a p e r s o n w i t h t h e e x p r e s s a u t h o r i t y t o do s o , b u t a v i o l a t i o n o f t h e e x i s t i n g r e s t r i c t i v e c o v e n a n t s c o m m i t t e d by a homeowner w i t h o u t any a u t h o r i t y . The t e s t a d o p t e d i n W r i g h t s i m p l y has no a p p l i c a t i o n t o t h i s c a s e and does n o t p r o v i d e any s o u n d l e g a l b a s i s t o p r e v e n t t h e e n f o r c e m e n t o f t h e r e s t r i c t i v e covenants. 9 26 2081099 t h e r e s t r i c t i v e c o v e n a n t s and t h e r e b y l e s s e n s t h e v a l u e o f subdivision property. We agree. In c r e a t i n g the the restrictive covenants, the p a r t n e r s h i p e x p r e s s l y d e c l a r e d t h a t the purpose o f t h e c o v e n a n t s was the P r o p e r t y . " covenants would classified Tubbs v. Any as " t o p r o t e c t t h e v a l u e and d e s i r a b i l i t y unauthorized run counter violation to So. 2d purpose and as a matter of 1358, 1361 M o r e o v e r , we subdivision property. supreme c o u r t ] law. of the actually increased has stated that an whether the value ( c i t i n g R e e t z v. E l l i s , explained by our of i n j u n c t i o n should d e p e n d upon w h e t h e r t h e damaged by t h e b r e a c h . " As Thus, the the "When a r e s t r i c t i v e c o v e n a n t i s b r o k e n , b a s i s f o r i n t e r f e r e n c e by i n j u n c t i o n . The not See property. i s s u e d b e c a u s e t h e mere b r e a c h o f t h e c o v e n a n t i s a a breach w i l l be restrictive subdivision conclude that i t i s immaterial c o n s t r u c t i o n of the steps [our of the would ( A l a . 1979). the s t e p s , i f a l l o w e d to stand i n v i o l a t i o n covenants, decrease the value restrictive that " i r r e p a r a b l e harm" B r a n d o n , 374 of the of right 279 supreme A l a . 453, 186 sufficient to e n j o i n such covenantee w i l l Tubbs v. B r a n d o n , 374 So. So. 2d a t 2d 915 be 1361 (1966)). court, " t h e r e a s o n s f o r t h i s r u l e a r e s t a t e d t o be t h a t t h e owner o f l a n d , when s e l l i n g t o a n o t h e r , may insist 27 be 2081099 on s u c h c o v e n a n t s as he p l e a s e s t o u c h i n g i t s use and has t h e r i g h t t o d e f i n e t h e i n j u r y f o r h i m s e l f ; and t h a t , when t h e c o v e n a n t i s b r o k e n , an i n j u n c t i o n s h o u l d i s s u e because, from the v e r y nature of the c a s e , t h e remedy a t l a w i s i n a d e q u a t e . " Reetz, 279 A l a . a t 460, 186 So. 2d a t 921. The trial court's r e a s o n i n g w o u l d i m p e r m i s s i b l y a l l o w i n d i v i d u a l homeowners t o violate restrictive covenants i f subjectively convinced value subdivision property. of the those t h a t the v i o l a t i o n homeowners were would improve That r e a s o n i n g the directly c o n t r a d i c t s t h e l a w t h a t "a p a r t y t o a c o v e n a n t i s e n t i t l e d t o seek its enforcement n e g a t i v e l y impact Inc. even i f ... breach the value of h i s p r o p e r t y . " v. Holm, 155 Wash. 2d 112, (2005). the Therefore, the t r i a l 121 n.4, 118 does not V i k i n g Props., P.3d 322, 327 court erred i n determining that the steps enhanced the v a l u e of the s u b d i v i s i o n p r o p e r t y i n denying The the A s s o c i a t i o n r e l i e f asserted declared and on t h a t b a s i s . A s s o c i a t i o n ' s Request f o r D e c l a r a t o r y R e l i e f B a s e d on should n.4 the have by f o r e g o i n g c o n s i d e r a t i o n s , the granted the that the request Association. the Julianos The had for trial agreed trial court declaratory court to relief should abide by have the r e s t r i c t i v e c o v e n a n t s when p u r c h a s i n g t h e i r p r o p e r t y ; t h a t t h e 28 2081099 Julianos upon h a d no r i g h t a common area to alter or construct i n the subdivision; v i o l a t e d § 3.05 o f t h e r e s t r i c t i v e the steps Tom on t h e common a r e a Sawyer Lake; and t h a t authority to require therefore reverse the extent an i m p r o v e m e n t that the Julianos covenants by c o n s t r u c t i n g leading from t h e i r p r o p e r t y t o the Association possessed the the Julianos t o remove t h e s t e p s . t h e judgment e n t e r e d by t h e t r i a l i t denied t h e above requested relief, We court t o 1 0 a n d we remand t h e c a u s e w i t h i n s t r u c t i o n s t h a t t h e t r i a l court a new j u d g m e n t i n a c c o r d a n c e w i t h Pursuant t o these instructions, that part court o f i t s judgment g r a n t i n g injunction against steps. the t r i a l this opinion. n e c e s s a r i l y must the Julianos the Association preventing enter vacate a permanent removal o f the 1 1 The A t t o r n e y ' s Fee a n d C o s t s Issue The A s s o c i a t i o n a l s o requests t h i s c o u r t t o reverse t h e j u d g m e n t i n s o f a r as i t does n o t c o n t a i n a d e c l a r a t i o n t h a t t h e J u l i a n o s v i o l a t e d t h e r e s t r i c t i v e covenants by c l e a r i n g t h e l a n d b e h i n d t h e i r p r o p e r t y ; however, t h e A s s o c i a t i o n has n o t made a n y l e g a l o r f a c t u a l argument on t h a t p o i n t a n d h a s thereby waived the issue. See R u l e 28, A l a . R. App. P. 10 T h e A s s o c i a t i o n does n o t a r g u e t h a t t h e J u l i a n o s must remove t h e p o r t i o n o f t h e s t e p s l y i n g e n t i r e l y w i t h i n t h e i r p r o p e r t y l i n e s ; t h e r e f o r e , we f i n d no e r r o r i n t h a t p a r t o f the judgment a l l o w i n g t h e J u l i a n o s t o m a i n t a i n t h o s e s t e p s . 11 29 2081099 In i t s c o u n t e r c l a i m , that "the expenses Association incurred i n c l u d i n g , but not the A s s o c i a t i o n sought a d e c l a r a t i o n is entitled i n enforcing limited to the a l l costs, terms to, court of the fees Covenants, costs, attorneys' i n t e r e s t and e x p e n s e s a r i s i n g f r o m t h e r e m o v a l o f t h e steps from the Association 12.02 in of the pertinent Julianos' Property based i t s request on and the the terms of r e s t r i c t i v e covenants. 1 2 and fees, concrete Common A r e a . " Section § 5.13 5.13 The and § provides, part: " A l l c o s t s and e x p e n s e s i n c u r r e d by t h e ARC o r t h e A s s o c i a t i o n i n e n f o r c i n g any o f t h e p r o v i s i o n s o f t h i s A r t i c l e V ... s h a l l be p a i d by s a i d Owner." Section 12.02 provides, in pertinent part: "[I]n the event the ... Board [of the A s s o c i a t i o n ] ... u n d e r t a k e [ s ] any l e g a l o r e q u i t a b l e a c t i o n w h i c h [ t h e B o a r d ] deem[s] n e c e s s a r y t o a b a t e , e n j o i n , remove o r e x t i n g u i s h any v i o l a t i o n o r b r e a c h I n i t s a p p e l l a t e b r i e f , t h e A s s o c i a t i o n a l s o c i t e d §§ 6.37 and 7.02 o f t h e r e s t r i c t i v e c o v e n a n t s as g r o u n d s f o r i t s r i g h t to recover attorney's f e e s and c o s t s ; however, we conclude t h a t the A s s o c i a t i o n d i d not b r i n g those p r o v i s i o n s t o the a t t e n t i o n of the t r i a l c o u r t b e f o r e or d u r i n g the t r i a l and t h a t , t h e r e f o r e , t h e A s s o c i a t i o n may n o t , f o r t h e f i r s t t i m e on a p p e a l , r a i s e t h e a p p l i c a b i l i t y o f t h o s e p r o v i s i o n s . See Norman v. Bozeman, 605 So. 2d 1210, 1214 ( A l a . 1992) ("Our r e v i e w i s l i m i t e d t o t h e i s s u e s t h a t were b e f o r e t h e t r i a l c o u r t -- an i s s u e r a i s e d on a p p e a l must have f i r s t b e e n p r e s e n t e d t o and r u l e d on by t h e t r i a l c o u r t . " ) . 1 2 30 2081099 o f t h i s D e c l a r a t i o n , t h e n a l l c o s t s and e x p e n s e s i n c u r r e d by e i t h e r o f them, i n c l u d i n g , w i t h o u t l i m i t a t i o n , a t t o r n e y s ' f e e s and c o u r t c o s t s , i n e n f o r c i n g any o f t h e t e r m s , p r o v i s i o n s , c o v e n a n t s o r c o n d i t i o n s i n t h i s D e c l a r a t i o n s h a l l be p a i d f o r by t h e Owner a g a i n s t whom s u c h a c t i o n was i n i t i a t e d . " In i t s judgment, the relief requested found the to [Association's] On by amount Association appeal, trial the of court denied A s s o c i a t i o n , and, attorney's be a l l the fees unreasonable, declaratory additionally, submitted stating claim for attorney's fees i s the A s s o c i a t i o n f i r s t by i t the that "the denied." argues t h a t i t d i d not f i l e a c l a i m f o r c o s t s or a t t o r n e y ' s fees i n i t s c o u n t e r c l a i m . We agree. its with The seeks o n l y a judgment d e c l a r i n g e n t i t l e m e n t t o a l l c o s t s and enforcing steps, pursuant not counterclaim request amount o f t h e the restrictive t o §§ that 5.13 the c o s t s and and trial attorney's covenants 12.02. court fees and The fees a g a i n s t the J u l i a n o s . removing the does adjudicate the the A s s o c i a t i o n i n e n f o r c i n g i t s r i g h t s and r e m o v i n g t h e s t e p s . f u r t h e r does n o t a s k t h e t r i a l associated counterclaim actually i n c u r r e d by fees The counterclaim c o u r t t o impose such c o s t s However, d u r i n g t h e t r i a l itself, t h e A s s o c i a t i o n c a l l e d i t s a t t o r n e y t o t e s t i f y as t o t h e f e e s i n c u r r e d by t h e A s s o c i a t i o n i n e n f o r c i n g t h e 31 and legal restrictive 2081099 covenants; the A s s o c i a t i o n a l s o i n t r o d u c e d the b i l l s by i t s a t t o r n e y to s u b s t a n t i a t e those fees. submitted Thus, i t a p p e a r s t h a t t h e A s s o c i a t i o n a c t u a l l y t r i e d t h e i s s u e o f t h e amount o f attorney's fees to which i t was entitled to recover. The A s s o c i a t i o n a l s o presented evidence i n d i c a t i n g that i t would cost $2,000 t o $6,000 t o remove t h e steps. Thus, t h e trial c o u r t r e a s o n a b l y c o u l d have t r e a t e d t h e i s s u e o f t h e amount o f costs and attorney's fees recoverable by the Association as R u l e 15, A l a . R. amended t o c o n f o r m to b e i n g w i t h i n the scope of the p l e a d i n g s . C i v . P. the (stating that pleadings evidence presented at The Association can be See trial). next argues that, assuming f i n d s t h a t t h e A s s o c i a t i o n d i d c l a i m t h a t i t was costs and attorney's that claim. any As fees, f o r the the trial c o s t s , the trial ground f o r denying t h a t c l a i m . g r a n t e d the maintain the court erred court this court entitled in denying d i d not However, t h e to trial state court J u l i a n o s a p e r m a n e n t i n j u n c t i o n a l l o w i n g them t o steps on the common area, so i t apparently d e t e r m i n e d t h a t no c o s t s f o r e n f o r c e m e n t o r r e m o v a l w o u l d e v e r be incurred. ruling granting Because the we have Julianos 32 reversed a the permanent trial court's injunction, we 2081099 instruct t h e t r i a l c o u r t on remand t o c o n s i d e r t h e amount o f c o s t s t h e A s s o c i a t i o n can r e c o v e r restrictive As denied c o v e n a n t s by for the the removing the attorney's c l a i m on the fees, appropriate for enforcing the steps. the trial ground t h a t the court totally amount o f t h e fees, p r o v e n t o be a r o u n d $70,000, were u n r e a s o n a b l e i n r e l a t i o n the costs of Association 12.02 removing argues entitles enforcing the that steps, the i t to recover the plain $2,000 to language a l l attorney's restrictive covenants $6,000. of §§ regardless of their court measuring a g a i n s t the Although Association attorney's 519 the r e s t r i c t i v e of entitled to fees, Alabama law recover reads only into of a t t o r n e y ' s a g r e e m e n t t o pay an specifically 1999) attorney to the the fees steps. every fees a ("In Alabama, f e e and the where agreement reasonableness So. there 2d 514, is agreement does reasonableness 33 the "reasonable" See A l a b a m a E d u c . A s s ' n v. B l a c k , 752 App. trial c o v e n a n t s do n o t s t a t e t h a t is (Ala. Civ. speak reasonableness c o s t s of removing the a l l o w i n g f o r the recovery limitation. the and fees i n c u r r e d i n The A s s o c i a t i o n f u r t h e r a r g u e s t h a t t h e in The 5.13 reasonableness. erred to of the fee, an not a 2081099 'reasonable' Station, fee w i l l be inferred."); I n c . v. B e d d i n g f i e l d , see a l s o 404 So. 2d 43 Twickenham (Ala. 1981); Selman v. B r y a n t , 261 A l a . 53, 72 So. 2d 704 ( 1 9 5 4 ) ; H a m i l t o n v. Burgess, 233 A l a . 4, 170 So. 348 (1936); a n d McGhee v . I m p o r t e r s & T r a d e r s N a t ' l Bank, 93 A l a . 192, 9 So. 734 ( 1 8 9 1 ) , overruled Ala. i n part 618, 33 agreements on o t h e r So. among 861 g r o u n d s b y N o b l e v. G i l l i a m , (1903). various Restrictive landowners covenants regarding 379, contract. covenant penalize with in equally read Black, that side 752 So. 2d a t 519. of a an a attorney-fee reasonableness neither up e x o r b i t a n t the other i n the context than Implying assures by r u n n i n g that provision i n a restrictive differently contracts. contracts the other knowledge fees. be i n other limitation The A s s o c i a t i o n h a s n o t c i t e d any t h a t an a t t o r n e y - f e e should provision l i k e any See g e n e r a l l y C o l l i n s v . R o d g e r s , 938 So. 2d 285 n.15 ( A l a . 2 0 0 6 ) . case h o l d i n g are t h e use and e n j o y m e n t o f t h e i r l a n d a n d t h e y s h o u l d be c o n s t r u e d other 136 will party attorney's have over fees t o pay those That c o n s i d e r a t i o n dispute can exists a violation of r e s t r i c t i v e c o v e n a n t s ; t h e r e f o r e , we c a n n o t d i s c e r n any v a l i d reason f o r d e v i a t i n g from t h e r u l e 34 i n this case. Hence, we 2081099 conclude that interpreting only the the We court restrictive reasonable restrictive trial attorney's did not commit any fees incurred that the in by recovery covenants to a l l o w error of enforcing covenants. do agree, however, trial court erred t o t a l l y denying the A s s o c i a t i o n ' s c l a i m f o r a t t o r n e y ' s the ground of t h e i r unreasonableness i n r e l a t i o n of removing restrictive the the the steps. Based on the in fees to the language costs of the c o v e n a n t s , t h e t r i a l c o u r t s h o u l d have d e t e r m i n e d reasonable amount of attorney's fees incurred by the A s s o c i a t i o n i n e n f o r c i n g the r e s t r i c t i v e covenants a g a i n s t Julianos. T h a t amount i s n o t between the of the c o s t s of the fees billed complaint, Charles covenants on the inapplicable, that by d i c t a t e d by removal of the the Juliano sought grounds the that restrictive that any violation violation should be e x c u s e d , and standing to enforce to enforce the had to the steps Association's violated, legal on they and the the were covenants been relationship attorney. avoid amount In his restrictive invalid had waived, not or been that any t h a t t h e A s s o c i a t i o n had the r e s t r i c t i v e covenants. restrictive the In order c o v e n a n t s , t h e A s s o c i a t i o n had 35 no to 2081099 incur attorney's fees to overcome each one of those contentions. That those f e e s u l t i m a t e l y exceeded t h e c o s t s o f the of the we agree w i t h the J u l i a n o s t h a t the c o s t s f o r removal steps does not render them per se unreasonable. Although r e p r e s e n t i n g t h e A s s o c i a t i o n on i n c o r p o r a t i o n and r a t i f i c a t i o n matters and f o r responding Charles J u l i a n o would to n o t be the considered enforce the r e s t r i c t i v e covenants, by the attorneys directed those toward claims costs the the r e s t r i c t i v e attorneys filed incurred to billed t o have been covenants. the For A s s o c i a t i o n the amounts r e p r e s e n t e d i n t h e i n v o i c e s i n t r o d u c e d a t t r i a l . trial court reasonable, the steps determining was but not bound to by a l l the other a c t i o n s taken f o r the A s s o c i a t i o n appear enforcing actions, tort accept those The amounts as i t c o u l d not c o n s i d e r the c o s t s of removing t o be the l i m i t of reasonableness. the reasonableness Rather, of the fees, the t r i a l in court s h o u l d have c o n s i d e r e d t h e r e l e v a n t f a c t o r s o r i g i n a l l y s e t o u t in Peebles v. Miley, 439 So. 2d 137 ( A l a . 1983), which include: "(1) t h e n a t u r e and v a l u e o f t h e s u b j e c t m a t t e r o f t h e employment; (2) t h e l e a r n i n g , s k i l l , and l a b o r 36 2081099 requisite to i t s proper discharge; (3) t h e t i m e consumed; (4) t h e p r o f e s s i o n a l e x p e r i e n c e and r e p u t a t i o n o f t h e a t t o r n e y ; (5) t h e w e i g h t o f h i s responsibilities; (6) t h e measure of success a c h i e v e d ; (7) t h e r e a s o n a b l e e x p e n s e s i n c u r r e d ; (8) w h e t h e r a f e e i s f i x e d o r c o n t i n g e n t ; (9) t h e n a t u r e and l e n g t h o f a p r o f e s s i o n a l r e l a t i o n s h i p ; (10) t h e fee c u s t o m a r i l y charged i n the l o c a l i t y f o r s i m i l a r legal services; (11) the likelihood that a p a r t i c u l a r employment may p r e c l u d e o t h e r employment; and (12) t h e t i m e l i m i t a t i o n s i m p o s e d b y t h e c l i e n t or by t h e c i r c u m s t a n c e s . " Van S c h a a c k v. AmSouth Bank, N.A., 1988). Moreover, factors, a trial i f after court 530 So. 2d 740, 749 ( A l a . considering concludes the appropriate that the b i l l e d attorney's f e e s a r e u n r e a s o n a b l e i n amount, t h e a p p r o p r i a t e a c t i o n i s n o t to deny t h e c l a i m a l t o g e t h e r b u t t o e n t e r reasonable amount o f a t t o r n e y ' s SSB v. S c h i l l e c i , Because the reasonableness removing the fees. 896 So. 2d 395 trial court of the attorney's steps, and a judgment f o r a See, e.g., B e a l Bank, ( A l a . 2004). erred in fees against because the t r i a l measuring the the costs court of entirely d e n i e d t h e c l a i m f o r a t t o r n e y ' s f e e s b a s e d on i t s f i n d i n g that t h e f e e s were u n r e a s o n a b l e i n amount, we r e v e r s e t h e j u d g m e n t as to this i s s u e and i n s t r u c t conduct f u r t h e r proceedings the t r i a l court on remand t o to determine the reasonable 37 amount 2081099 of the attorney's fees restrictive The In i n c u r r e d by the covenants against the U n j u s t - E n r i c h m e n t , F r a u d , and one count of Enrichment," Charles his Association in Julianos. enforcing 1 3 Quantum M e r u i t complaint, J u l i a n o a s s e r t e d as Claims entitled "Unjust follows: "33. Juliano has paid assessments and homeowner's dues to the defendants on the representations t h a t he was r e q u i r e d t o do so p u r s u a n t t o t h e s t a t e m e n t s and r e p r e s e n t a t i o n s of the defendants. In fact, Juliano has been threatened concerning h i s compliance with c e r t a i n C o v e n a n t s and has p a i d money t o t h e d e f e n d a n t s w h i c h should have n e v e r b e e n p a i d . The Willow Lakes R e s i d e n t i a l A s s o c i a t i o n , I n c . has n e v e r b e e n c r e a t e d and/or has failed to follow the corporate formalities as is required by the Covenants, A r t i c l e s o f I n c o r p o r a t i o n , and B y l a w s . Mr. J u l i a n o i s due t o be r e f u n d e d h i s p a y m e n t s . " In another count Misrepresentation," of his complaint, Juliano further entitled "Fraudulent averred: "41. J u l i a n o p u r c h a s e d l o t s and p a i d money t o the defendants under the r e p r e s e n t a t i o n t h a t the money was going to the Willow Lakes R e s i d e n t i a l A s s o c i a t i o n , I n c . , as s t a t e d i n t h e C o v e n a n t s . The defendants made the misrepresentations and/or conveyed the m i s r e p r e s e n t i n g i n f o r m a t i o n to J u l i a n o . We n o t e t h a t t h e r e c o r d i n d i c a t e s t h a t t h e i n v o i c e s d i d n o t i n c l u d e t h e amounts c h a r g e d f o r t r y i n g t h e c a s e . On remand, we i n s t r u c t t h e t r i a l c o u r t t o c o n s i d e r n o t o n l y t h e i n v o i c e s submitted at t r i a l , but a l s o a l l evidence r e l a t i n g to t h e amount o f a t t o r n e y ' s f e e s i n c u r r e d t h r o u g h t h e t r i a l and the p o s t t r i a l p r o c e e d i n g s r e l a t i n g t o enforcement of the r e s t r i c t i v e covenants. 13 38 2081099 "42. I n f a c t , t h e Willow Lakes R e s i d e n t i a l A s s o c i a t i o n , I n c . has never been c r e a t e d and i s n o t a proper corporation. "43. J u l i a n o r e l i e d upon t h e m i s r e p r e s e n t a t i o n s made b y t h e d e f e n d a n t s . J u l i a n o was j u s t i f i e d i n relying upon the misrepresentations of the defendants. "44. As a r e s u l t o f h i s r e l i a n c e on t h e misrepresentations o f t h e d e f e n d a n t s , Mr. J u l i a n o has b e e n damaged." B a s e d on t h o s e a l l e g a t i o n s , J u l i a n o r e q u e s t e d court that the t r i a l a w a r d h i m c o m p e n s a t o r y a n d p u n i t i v e damages. In i t s f i n a l j u d g m e n t , t h e t r i a l c o u r t a w a r d e d J u l i a n o $20,000, b a s e d partially on h i s c l a i m s misrepresentation. On of unjust appeal, codefendants argue t h a t t h e t r i a l enrichment and f r a u d u l e n t the Association and t h e c o u r t s h o u l d have e n t e r e d a j u d g m e n t i n t h e i r f a v o r on t h e c l a i m s o f u n j u s t e n r i c h m e n t a n d fraudulent The misrepresentation. evidence shows 1 4 that, when the Julianos purchased t h e i r home i n t h e s u b d i v i s i o n , t h e y p a i d a p r o r a t a s h a r e o f T h e A s s o c i a t i o n a d o p t e d t h e a r g u m e n t s made b y i t s codefendants i n t h e i r a p p e l l a t e b r i e f regarding the unjustenrichment c l a i m and t h e v a r i o u s t o r t c l a i m s f i l e d by C h a r l e s Juliano. We f i n d t h a t J u l i a n o d i d n o t s u f f e r a n y p r e j u d i c e by t h a t b r i e f i n g method, so we r e j e c t h i s o b j e c t i o n t o t h e same. 14 39 2081099 t h e homeowners' dues f o r t h e y e a r 2005. Thereafter, f r o m 2006 t h r o u g h 2008, t h e J u l i a n o s p a i d t h e i r a n n u a l homeowners' i n January of the r e s p e c t i v e y e a r s i n r e s p o n s e t o an i n v o i c e s u b m i t t e d by t h e A s s o c i a t i o n . that Charles Juliano representations at t r i a l Although the complaint a l l e g e s paid the dues in t h a t t h e A s s o c i a t i o n was a v a l i d he t e s t i f i e d , upon q u e s t i o n i n g reliance by h i s a t t o r n e y , "Q: Now, a l s o d i d you p a y homeowners dues t o a s s o c i a t i o n i n J a n u a r y o f 2006? that Yes, I d i d . "Q: Why d i d you p a y that? "A: W e l l , a t t h e t i m e I h a d a l r e a d y p u t t h e s t e p s i n , and I g u e s s I j u s t w a n t e d t o be a g o o d n e i g h b o r and t h e h e l p t h e community. "Q: D i d t h e W i l l o w L a k e s R e s i d e n t i a l A s s o c i a t i o n represent t o you t h a t t h e y were an incorporated entity? "A: No. "Q: D i d you u n d e r s t a n d i n J a n u a r y o f 2006 a f t e r you i n s t a l l e d t h e s t e p s t h a t Ms. Z a v a t t i was c l a i m i n g t h a t t h e y were an a s s o c i a t i o n ? "A: Y e a h . She s a i d i t was an a s s o c i a t i o n . "Q: And when Ms. Z a v a t t i and t h e A s s o c i a t i o n s e n t you t h e b i l l s due, d i d you p a y them b e c a u s e you f e l t l i k e t h a t t h e y were an a s s o c i a t i o n ? 40 on corporation, follows: "A: dues as 2081099 "A: A t t h e t i m e -- a t t h a t p o i n t i n t i m e , t h e y had t o l d me t h e y were -- you know, t h e y had s e n t a l e t t e r by t h e A s s o c i a t i o n . I p a i d i t b e c a u s e I was l i v i n g i n the neighborhood. "Q: Was i t y o u r u n d e r s t a n d i n g f r o m what t h e y t h a t you had t o pay t h a t d u e s ? "A: B e c a u s e i t had a l a t e c h a r g e on said there. "Q: Was i t y o u r u n d e r s t a n d i n g t h a t you were r e q u i r e d as a homeowner i n t h a t n e i g h b o r h o o d , b a s e d upon what Ms. Z a v a t t i s a i d , t o pay t h o s e b i l l s ? "A: Not Juliano really." later retaining testified his attorney, on he cross-examination " d i d not i n c o r p o r a t i o n or a s s o c i a t i o n . " he had been no evidence that, know a n y t h i n g before about Juliano further t e s t i f i e d i n d i c a t i n g that the any that homeowners' dues had misappropriated. U n j u s t e n r i c h m e n t o c c u r s when " ' " ( 1 ) t h e d o n o r o f t h e b e n e f i t ... a c t e d u n d e r a m i s t a k e o f f a c t o r i n m i s r e l i a n c e on a r i g h t o r duty, or (2) t h e r e c i p i e n t of the b e n e f i t ... e n g a g e d i n some u n c o n s c i o n a b l e c o n d u c t , s u c h as fraud, coercion, or abuse of a confidential relationship. In the absence of mistake or m i s r e l i a n c e by t h e d o n o r o r w r o n g f u l c o n d u c t by t h e r e c i p i e n t , t h e r e c i p i e n t may have b e e n e n r i c h e d , b u t he i s n o t deemed t o have b e e n u n j u s t l y e n r i c h e d . " ' " Mantiply v. Mantiply, 951 So. ( q u o t i n g W e l c h v. Montgomery Eye 41 2d 638, 654-55 Physicians, P.C., (Ala. 891 2006) So. 2d 2081099 837, 843 ( A l a . 2 0 0 4 ) , q u o t i n g i n t u r n J o r d a n v. M i t c h e l l , 705 So. 2d 453, 458 ( A l a . C i v . App. 1 9 9 7 ) ) ; s e e a l s o Wyeth, I n c . v. B l u e C r o s s & B l u e S h i e l d o f A l a b a m a , [Ms. 1050926, J a n . 15, 2010] of So. 3d fraudulent ( A l a . 2010). misrepresentation, evidence o f "(1) a f a l s e existing fact; (4) who damage misrepresentation." (Ala. support a claim the p l a i n t i f f representation; (3) r e a s o n a b l y suffered To p r o p e r l y relied (2) o f a this as a p r o x i m a t e P a d g e t t v . Hughes, consequence of t h e 535 So. 2d 140, 142 case, i t i s apparent that, t h e A s s o c i a t i o n was a c o r p o r a t i o n . v. requires when State, that 901 So. 2d 1, 4 actually t e s t i m o n y , when J u l i a n o made h i s f i r s t corporate entity. by anyone that representation ( A l a . 2004) the misrepresentation misinformed he p a i d h i s See Hunt i n j u r e d p a r t y t o change i t s c o u r s e o f a c t i o n . " ) . been material upon b y t h e p l a i n t i f f ; homeowners' d u e s , J u l i a n o d i d n o t r e l y on any Corp. provide 1988). In that must Petroleum ("Reliance induced the B a s e d on h i s p a y m e n t s , he h a d n o t the Association As he f u r t h e r t e s t i f i e d , was a Juliano paid h i s homeowners' dues i n 2005 a n d 2006 w i t h o u t a n y k n o w l e d g e o f t h e corporate status of the A s s o c i a t i o n . 42 He later paid the 2081099 homeowners' dues i n 2007 a n d 2008 a f t e r been formally prior failure nature of material See incorporated of formal Bama B u d w e i s e r Inc., full incorporation. the business to Juliano's and w i t h t h e A s s o c i a t i o n had organization knowledge o f t h e A t no p o i n t of the was t h e Association d e c i s i o n t o p a y h i s homeowners' o f Montgomery, dues. I n c . v. Anheuser-Busch, 611 So. 2d 238, 244 ( A l a . 1992) ("A ' m a t e r i a l f a c t ' i s a f a c t o f s u c h a n a t u r e a s t o i n d u c e a c t i o n on t h e p a r t o f t h e complaining party."). J u l i a n o f a i l e d t o present evidence t o support h i s fraudulent-misrepresentation and u n j u s t - e n r i c h m e n t c l a i m s r e l a t i n g t o t h e payment o f homeowners' d u e s . The t r i a l c o u r t , t h e r e f o r e , e r r e d i n a w a r d i n g a n y damages on a c c o u n t o f those claims. I n p a r a g r a p h 34 o f h i s u n j u s t - e n r i c h m e n t c l a i m , Juliano asserted: "34. J u l i a n o h a s a l s o i n v e s t e d t i m e , money, a n d expense i n i n s t a l l i n g steps and m a i n t a i n i n g p r o p e r t y w h i c h i s on t h e common a r e a . Pursuant t o the Covenants, the R e s i d e n t i a l A s s o c i a t i o n ( i . e . , the W i l l o w Lakes R e s i d e n t i a l A s s o c i a t i o n , Inc.) i s r e s p o n s i b l e a n d r e q u i r e d t o m a i n t a i n e d a l l common a r e a s a n d h a s f a i l e d a n d r e f u s e d t o do s o . " As f o r any t h e o r y enriched that the Association by t h e c o n s t r u c t i o n of the steps, 43 has been that unjustly claim fails 2081099 b a s e d on o u r d i s p o s i t i o n o f t h e A s s o c i a t i o n ' s w h i c h we c o n c l u d e d t h a t the Association counterclaim i n d i d n o t r e c e i v e any b e n e f i t from the c o n s t r u c t i o n o f t h e s t e p s , which v i o l a t e d t h e restrictive covenants. To t h e e x t e n t that the t r i a l a w a r d e d damages t o J u l i a n o b a s e d on t h a t t h e o r y , i s due t o be i t s judgment reversed. Juliano presented evidence i n d i c a t i n g that, before i n t o h i s home, he c l e a r e d property, partially on t h e common evidently s o u g h t t o be p a i d b y t h e A s s o c i a t i o n which was area. the common a r e a u n d e r t h e t h e o r y of quantum meruit, equitable relief knowingly later based on services b e n e f i t and r e s u l t t h e r e o f , determined In h i s complaint, is a the p r i n c i p l e rendered by with another, 2d 470, 474 (Ala. i f one and t h e knowledge, t o pay t h e C a r r o l l v. LJC 24 So. 3d 448, 458 ( A l a . C i v . App. 2009) ( q u o t i n g F r a n k C r a i n A u c t i o n e e r s , So. A claim request f o r "'"that reasonable value o f such s e r v i c e s rendered."'" Inc., Juliano t h e l a w i m p l i e s a p r o m i s e on t h e o f t h e one who so a c c e p t s Defense C o n t r a c t i n g , t o be f o r clearing o f quantum m e r u i t . or quasi-contract, accepts moving an a r e a o f t h i c k b r u s h b e h i n d t h e Julianos' part court C i v . App. 44 I n c . v . D e l c h a m p s , 797 2000), quoting i n turn 2081099 Richards v. W i l l i a m s , (1936)). 231 A l a . 450, In t h e i r appellate b r i e f s , codefendants argue only from that 453, 165 Juliano recovering theory. However, t h e A s s o c i a t i o n of unclean u n d e r h i s quantum applies D a v i s v. S t e r n e , 2007) to prevent Agee explaining against financial-services from meruit equitable recovering. See I n c . , 965 So. 2d 1076 ( A l a . i t s specific relevance company was to her insufficient action t o meet r e q u i r e m e n t s o f R u l e 2 8 ( a ) ( 1 0 ) , A l a . R. App. P., t o c i t e r e l e v a n t a u t h o r i t y i n support of arguments). therefore, any hands ( a p p e l l a n t ' s lone c i t a t i o n t o a g e n e r a l p r i n c i p l e of law without the Juliano & Leach, 823 and i t s c o d e f e n d a n t s h a v e w a i v e d t h a t argument b y f a i l i n g t o e x p l a i n how t h a t doctrine 820, t h e A s s o c i a t i o n and i t s the doctrine prevents So. The t r i a l court, d i d n o t commit r e v e r s i b l e e r r o r by f a i l i n g to bar recovery on t h e t h e o r y t h a t J u l i a n o had u n c l e a n hands. However, t h e A s s o c i a t i o n and i t s c o d e f e n d a n t s h a v e a r g u e d that the record does amount o f t h e damages that he h i r e d two men not contain evidence awarded t o J u l i a n o . to clear to support Juliano the property the testified and t h a t they s t a r t e d t h e c l e a r i n g p r o c e s s t h e l a s t weekend o f J u l y 2005 and completed t h e j o b i n e a r l y A u g u s t 2005, w o r k i n g 45 a total of 2081099 five days. Juliano's son, t h e n p e r f o r m e d "a l i t t l e or two." costs Juliano did i n c u r r e d by him e v i d e n c e as t o t h e who owned a l a n d s c a p i n g company, improvement" f o r J u l i a n o not offer f o r the any evidence regarding record does n o t contain any See Associates C o m m e r c i a l C o r p . v. Civ. App. 2002) R o b e r t s , 844 (reversing any basis an a w a r d o f damages u n d e r J u l i a n o ' s quantum m e r u i t (Ala. the clearing services. for 1262 day c l e a r i n g p r o j e c t or p r e s e n t r e a s o n a b l e v a l u e of the Without such e v i d e n c e , the f o r "a So. judgment theory. 2d on 1256, quantum m e r u i t c l a i m b a s e d on l a c k o f e v i d e n c e o f r e a s o n a b l e v a l u e services provided). We therefore reverse the judgment t o e x t e n t i t a w a r d e d damages b a s e d on t h e quantum m e r u i t The In asserted another count Slander of his t h a t the A s s o c i a t i o n homeowners in the complaint, issued that t e s t i f i e d as t o s e v e r a l l e t t e r s and the contained homeowners in the theory. a letter At Juliano to a l l the intentionally trial, Juliano n o t i c e s t h a t were s e n t subdivision, f a l s e s t a t e m e n t s t h a t had Charles contained f a l s e statements that disparaged J u l i a n o . all the Claims had subdivision of which he to alleged d i s p a r a g e d him. Because J u l i a n o c l a i m e d damages f o r a l l e g e d f a l s e s t a t e m e n t s published 46 2081099 in written form, Association and he actually attempted i t s codefendants had to prove libeled that him. the First I n d e p . B a p t i s t C h u r c h o f A r a b v. S o u t h e r l a n d , 373 So. 2d 648 ( A l a . 1979) which springs material."). ( " L i b e l i s commonly p e r c e i v e d as a d e f a m a t i o n from the Libel publication, when publication consists of McGraw v. "'any written false 182, Thomason, or and printed malicious writing, or by w h i c h ... t e n d s t o b r i n g an i n d i v i d u a l i n t o p u b l i c h a t r e d , contempt, 293 A l a . 178, of expressed i n p r i n t i n g or s i g n s o r p i c t u r e s , ... Pow, 647, 301 265 or r i d i c u l e B o w l i n g v. So. 2d 55, 58-59 A l a . 635, 639, 93 (1974) So. (quoting 2d 741, 744 (1957)). Essentially, the letters and notice of which c o m p l a i n s i n f o r m t h e homeowners o f t h e o n g o i n g s t a t u s Juliano of the d i s p u t e b e t w e e n t h e J u l i a n o s and t h e A s s o c i a t i o n r e g a r d i n g t h e construction Sawyer of Lake. the The steps first on the letter common area indicates that next to Tom Juliano had threatened l e g a l a c t i o n , prompting the A s s o c i a t i o n l e g a l c o u n s e l , whose f e e s t h e A s s o c i a t i o n from Juliano, assessment but which might i n the meantime have t o be i n the 47 event to r e t a i n intended to c o l l e c t paid by a the funds special in the 2081099 Association's The treasury d i d not adequately cover those fees. s e c o n d w r i t i n g c o n s i s t s o f a n o t i c e t o a l l t h e homeowners i n which Harrington, the Association, a c t i n g as i n f o r m e d the been u n a b l e t o r e s o l v e the the p r e s i d e n t of the b o a r d homeowners t h a t dispute over the the steps r e s u l t i n g i n the i n s t a n t l a w s u i t i n which J u l i a n o "the very existence" of the Association and board of had amicably, "threatened" t h a t had caused t h e A s s o c i a t i o n t o i n c u r $20,000 i n l e g a l f e e s t h a t w o u l d have t o be p a i d by s p e c i a l assessment. t h e homeowners t h a t J u l i a n o was The third letter seeking informed thousands of d o l l a r s i n damages t h a t , i f a w a r d e d , u l t i m a t e l y w o u l d have t o be by the homeowners. additional Juliano writing, led complained some o f c o n t e m p t u o u s l y , b e l i e v i n g he was his that those, neighbors to personally i n c r e a s i n g t h e i r homeowners' d u e s . paid and one treat him responsible for 1 5 A l t h o u g h t h e argument was n o t r a i s e d by t h e A s s o c i a t i o n o r i t s c o d e f e n d a n t s , we n o t e t h a t s u c h w r i t i n g s regarding ongoing l i t i g a t i o n ordinarily are t r e a t e d as absolutely p r i v i l e g e d communications i n other j u r i s d i c t i o n s . See, e.g., B l a c k v. G r e e n H a r b o u r Homeowners' A s s ' n , 19 A.D.3d 962, 798 N.Y.S.2d 753 ( 2 0 0 5 ) ; and H e a l y v. T u s c a n y H i l l s L a n d s c a p e & R e c r e a t i o n C o r p . , 137 C a l . App. 4 t h 1, 39 C a l . R p t r . 3d 547 (2006). 1 5 48 2081099 In not order to sustain enough that the a cause of action defendant's for libel, statements lead i t is to the d i s p a r a g e m e n t o f t h e p l a i n t i f f ; t h o s e s t a t e m e n t s must be f a l s e and d e f a m a t o r y . 747, 748 ( A l a . 1987). fact The s t a t e m e n t s made i n t h e l e t t e r s a n d do n o t c o n t a i n notices The See T i d w e l l v. W i n n - D i x i e , I n c . , 502 So. 2d any f a l s e s t a t e m e n t s o r a l l e g a t i o n s . i s that Juliano d i d threaten legal action and d i d i n s t i t u t e a l a w s u i t i n w h i c h he s o u g h t a d e c l a r a t i o n t h a t t h e Association exist. was n o t p r o p e r l y incorporated J u l i a n o a l s o c l a i m e d damages a g a i n s t whose treasury was paid by individual the Consequently, would, any funded damages recovered in the from assessments subdivision. the Association i n o r d e r t o be l i b e l o u s , t h e c o m m u n i c a t i o n be d i r e c t e d t o a t h i r d p a r t y . ( A l a . 1992). homeowners' ongoing the A s s o c i a t i o n , e n t i r e l y b y dues and homeowners d i d not i n f a c t , be p a y a b l e b y t h e homeowners. Moreover, 290 and, t h u s , dispute homeowners' communication dues H o o v e r v. T u t t l e , 611 So. 2d Communications association that are protected and the could of must among t h e d i r e c t o r s homeowners result the type under 49 of in an of a regarding an increase in intra-organizational Alabama law. See generally 2081099 N e l s o n v. L a p e y r o u s e G r a i n C o r p . , 534 So. 2d 1085 ( A l a . 1988) (recognizing management that intra-corporate and employees communication i s protected among t o the extent communication t o t h e employees f a l l s w i t h i n t h e p r o p e r of the t h e employees' knowledge and d u t i e s ) . publications of the l e t t e r s In t h i s and n o t i c e s were the scope instance, directed s o l e l y t o t h e homeowners i n t h e s u b d i v i s i o n , whose i n t e r e s t s were a t s t a k e i n the l i t i g a t i o n . The a u t h o r s d i d n o t d i r e c t the communications t o any " t h i r d p a r t y " w i t h i n t h e meaning o f Alabama l a w . For extent the foregoing reasons, the t r i a l court erred tothe i t a w a r d e d damages t o J u l i a n o on a c c o u n t o f h i s l i b e l claims. The D e p r i v a t i o n - o f - P r o p e r t y - R i g h t s Section 3.01 o f t h e r e s t r i c t i v e Claim covenants s t a t e s : "Subject t o t h e terms and c o n d i t i o n s o f t h e D e c l a r a t i o n and t h e r u l e s , r e g u l a t i o n s , fees and charges from time t o time e s t a b l i s h e d by t h e Board [of t h e A s s o c i a t i o n ] , D e v e l o p e r does h e r e b y g r a n t t o e a c h Owner a n d O c c u p a n t t h e n o n e x c l u s i v e right, p r i v i l e g e and easement o f a c c e s s t o and t h e u s e and e n j o y m e n t o f t h e Common A r e a s i n common w i t h t h e Developer. P u r s u a n t t o § 3.01, C h a r l e s and u s e t h e common area J u l i a n o had the r i g h t immediately 50 behind t o access the Julianos' 2081099 property. its At t r i a l , Juliano claimed codefendants had impaired barriers across the t r i a l complaint to assert additional part claim, on t h a t that f o r several court allowed "deprivation and i t awarded Juliano of property Juliano In i t s t o amend h i s rights" $20,000, as an based i n t h e A s s o c i a t i o n and i t s codefendants c o r r e c t l y Juliano's right of access common a r e a d i d n o t a u t h o r i z e the months. claim. On a p p e a l , argue t h a t r i g h t by p l a c i n g tape and the steps judgment, t h a t t h e A s s o c i a t i o n and t o , and use o f , t h e him t o c o n s t r u c t common a r e a a n d t o u s e t h o s e s t e p s t o gain steps across access t o the l a k e and i t s surroundings. S e c t i o n 3.01 s p e c i f i c a l l y that the right, p r i v i l e g e , a n d easement g r a n t e d t o J u l i a n o a s a homeowner i n t h e s u b d i v i s i o n i s " s u b j e c t conditions of determined above Juliano from the Declaration that the r e s t r i c t i v e constructing Alabama l a w r e c o g n i z e s and the steps t o t h e terms and rules." This covenants on provides precluded t h e common t h a t an easement h o l d e r court area. g e n e r a l l y has a r i g h t t o damages f o r u n r e a s o n a b l e i n t e r f e r e n c e w i t h t h e u s e of an easement, consistent with but only when the purposes such use i s i n a o f t h e easement. 51 manner See Duke v . 2081099 Pine Crest follows Homes, that interference easement. use I n c . , 358 So. 2d 148 an easement h o l d e r with a use t h a t cannot ( A l a . 1978). recover violates damages f o r t h e terms of the B e c a u s e J u l i a n o h a d no r i g h t t o b u i l d s t e p s f o r h i s on t h e common a r e a , that right. he c a n n o t claim any d e p r i v a t i o n o f To t h e e x t e n t t h e t r i a l c o u r t a w a r d e d damages f o r d e p r i v a t i o n of t h e use of t h e steps, The Charles Association, trespassed Juliano Trespass also Claims alleged i t s codefendants, on t h e J u l i a n o s ' i t s judgment i s r e v e r s e d . i n h i s complaint and their property. At t r i a l , o c c u r r e d when Z a v a t t i came o n t o t h e J u l i a n o s ' f o r the purpose of obtaining p r o f e s s i o n a l survey of the property line separating The second direction came when a man to the Julianos' a when H a r r i n g t o n working door area. under Zavatti's to inquire as t o t h e The t h i r d i n s t a n c e a n d Van G i l d e r r e p a i r e d 52 land definitive f r o m t h e common l o c a t i o n of theb a r r i e r behind the Juliano property, man h a d b e e n a s s i g n e d t o r e p a i r . trespass. i n order t o e s t a b l i s h the the Julianos' property occurred of alleged Juliano The surveyors instances representatives t o three with separate that the testified first It which the occurred tape surrounding the 2081099 steps after during members of the Julianos' a Sunday a f t e r n o o n Article 3.04 family tore i t down visit. of the r e s t r i c t i v e covenants grants the A s s o c i a t i o n and i t s agents "a p e r m a n e n t a n d p e r p e t u a l nonexclusive easement a p p u r t e n a n t , o v e r , a c r o s s , t h r o u g h a n d upon e a c h L o t and D w e l l i n g a n d f o r t h e p u r p o s e o f p r o v i d e d i n g r e s s t o a n d e g r e s s f r o m e a c h l o t a n d D w e l l i n g a n d f o r (a) i n s p e c t i n g each L o t and D w e l l i n g and Improvements thereon i n order t o determine compliance with the p r o v i s i o n s o f t h i s D e c l a r a t i o n a n d (b) p e r f o r m a n c e o f t h e r e s p e c t i v e d u t i e s ... h e r e u n d e r , i n c l u d i n g , w i t h o u t l i m i t a t i o n s , t a k i n g any a c t i o n r e q u i r e d o r p e r m i t t e d t o be t a k e n b y t h e D e v e l o p e r , t h e ARC a n d t h e A s s o c i a t i o n p u r s u a n t t o any o f t h e t e r m s o f provisions of t h i s Declaration." Section 6.37 of Association with the restrictive covenants charges the duty of t a k i n g a l l necessary a c t i o n t o extinguish or correct v i o l a t i o n s of the r e s t r i c t i v e and g r a n t s the covenants t h e A s s o c i a t i o n t h e power t o e n t e r o n t o any l o t f o r that purpose. Section 12.11 f u r t h e r p r o v i d e s that, "[w]henever the Association, ... and [ i t s ] respective agents, employees, representatives, successors, and a s s i g n s , are permitted by t h i s D e c l a r a t i o n t o e n t e r upon o r c o r r e c t , r e p a i r , c l e a n , m a i n t a i n o r p r e s e r v e o r do any o t h e r a c t i o n w i t h i n a p o r t i o n of a Lot or Dwelling, the entering thereon s h a l l n o t be deemed a t r e s p a s s . " By i m p l i e d l y a g r e e i n g purchased t o t h e f o r e g o i n g p r o v i s i o n s when he the l o t , Juliano consented 53 to the entry upon t h e 2081099 J u l i a n o s ' l a n d by t h e A s s o c i a t i o n and i t s r e p r e s e n t a t i v e s f o r the purposes of e n f o r c i n g the r e s t r i c t i v e who has consented to entry upon h i s l a n d a s s o c i a t i o n cannot m a i n t a i n entry conforms Ass'n, 779 S.W.2d 603 not r e v e a l e d revoke to that any In 1989). Our once party homeowners' when s u c h See Murphy v. T i m b e r C t . App. consent A Trace research has unilaterally i m p l i e d l y granted through a covenant. this property a c a s e s a l l o w i n g a homeowner t o h i s or her restrictive by an a c t i o n f o r t r e s p a s s consent. (Mo. covenants. case, was each committed of the entries by r e p r e s e n t a t i v e s onto the Julianos' of the A s s o c i a t i o n f o r the purposes of i n v e s t i g a t i n g or a b a t i n g v i o l a t i o n s of the r e s t r i c t i v e covenants. Those e n t r i e s f e l l w i t h i n t h e s c o p e o f the the consent given to Association restrictive covenants. Even August 2006, the 22, 16 when i f the by Juliano acts occurred Association properly in the before formed a c o r p o r a t i o n , a m a j o r i t y o f a quorum o f t h e homeowners r a t i f i e d t h o s e a c t s a t t h e J a n u a r y 8, 2007, m e e t i n g , t r a n s f o r m i n g into acts The trespass. 16 of the record incorporated i s unclear as 54 Association. See to the date of each them generally alleged 2081099 Warwick 1985) Dev. Co. v. GV Corp., So. 2d 1270, 1276 (Ala. ("Even t h o u g h p r o m o t e r s o r i n i t i a l i n c o r p o r a t o r s a r e t e c h n i c a l l y agents of the corporation acts 469 of succeeds i s f o r m e d and i t s promoters to c o r p o r a t i o n t o be a l l the the and new f o r m e d , once corporation incorporators, rights and ratifies the remedies, as not the the corporation well as the l i a b i l i t i e s , w h i c h t h e p r o m o t e r s and i n i t i a l i n c o r p o r a t o r s had acquired before could not complain that entry by representatives We provides without incorporation."). Thus, his not consent did of the u n i n c o r p o r a t e d f u r t h e r note a privilege trespassing. that Ala. Code to surveyors Section Juliano include Association. 1975, to enter 34-11-2(d)(1) § 34-11-2 ( d ) ( 1 ) , portions of provides: "A p r o f e s s i o n a l l a n d s u r v e y o r may go on, o v e r , and upon t h e l a n d s o f o t h e r s w h i c h i s n o t e n c l o s e d by any d e v i c e i n s t a l l e d t o d e t e r e n t r y t o o r e x i t f r o m i n d u s t r i a l f a c i l i t i e s o r p l a n t s i t e s by humans o r v e h i c l e , i f n e c e s s a r y to perform surveys f o r the location of section corners, quarter corners, p r o p e r t y c o r n e r s , b o u n d a r y l i n e s , r i g h t s - o f - w a y , and e a s e m e n t s , and may c a r r y and u t i l i z e e q u i p m e n t and v e h i c l e s . E n t r y under the r i g h t granted in this subdivision shall not constitute trespass. A p r o f e s s i o n a l l a n d s u r v e y o r s h a l l n o t be l i a b l e t o a r r e s t o r t o a c i v i l a c t i o n f o r t r e s p a s s by r e a s o n of t h i s e n t r y . " 55 land 2081099 B e c a u s e t h e s u r v e y o r s who for trespassing onto a c c o m p a n i e d Z a v a t t i c a n n o t be the unfenced p o r t i o n of the liable Julianos' property, w h i c h i s t h e p a r t J u l i a n o t e s t i f i e d had b e e n entered upon, no liability or i t s codefendants Hollis v. on can be imputed to the account of C i t y of B r i g h t o n , ("[I]f a putative servant i n n o c e n t o r b e c a u s e he visited any actions 885 So. i s not 2d of 135, liable, i s immune, no Association the surveyors. 142 ( A l a . 2004) e i t h e r b e c a u s e he liability e x i s t s to upon t h e p u t a t i v e m a s t e r u n d e r t h e r u l e o f is be respondeat superior."). B a s e d on t h e f o r e g o i n g , any damages t o J u l i a n o on its the t r i a l c o u r t e r r e d i n awarding account of h i s t r e s p a s s judgment i n t h a t r e g a r d is claims and reversed. Conclusion I n summary, we its entirety. trial court granting and the denying unjust claims We reverse remand t h e vacate claim enrichment, the seeking case w i t h i t s judgment declaratory the the judgment of the t r i a l damages relief for and instructions that enter r e q u e s t e d by a c l a i m o f quantum m e r u i t , 56 by new the injunctive relief, requested court i n Juliano. the judgment Association the and We claim the of tort further 2081099 instruct the t r i a l c o u r t t o conduct further proceedings f o r the purpose o f d e t e r m i n i n g t h e c o s t s and r e a s o n a b l e a t t o r n e y ' s fees t o be restrictive awarded to the Association f o r enforcing the covenants. REVERSED AND REMANDED WITH INSTRUCTIONS. Thompson, P . J . , and P i t t m a n , concur. 57 Bryan, a n d Thomas, JJ.,
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