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Commonwealth Savingshares Corporation v. Fayetteville Holdings, LLC

Alabama Court of Civil Appeals

June 30, 2017

Commonwealth Savingshares Corporation
Fayetteville Holdings, LLC, et al.

         Appeal from Jackson Circuit Court (CV-06-213)


         Commonwealth Savingshares Corporation ("Commonwealth") appeals the judgment entered by the Jackson Circuit Court ("the trial court") in favor of Fayetteville Holdings, LLC ("Fayetteville"), Awesome Properties, LLC ("Awesome Properties"), the Industrial Port and Rail Center of Scottsboro, LLC, and the City of Scottsboro on Commonwealth's claims seeking a declaratory judgment, an injunction, and an award of damages based on theories of trespass and nuisance. At issue is an easement ("the easement") for an industrial conveyor ("the conveyor") that runs through Commonwealth's property. After an annexation in 2004 by the City of Scottsboro, the parties' properties were subjected to the regulations in the Scottsboro Zoning Ordinance ("the ordinance"). Commonwealth argues that the ordinance prohibits the presence of the conveyor, thereby extinguishing the easement, and that the conveyor is a nuisance. We determine that the conveyor is permitted as a nonconformity under the ordinance, that the easement is not extinguished, and that the conveyor is not a nuisance. As a result of those holdings, we affirm the judgment, and we pretermit discussion of Commonwealth's arguments regarding the trial court's alternative grounds to support the judgment.

         Facts and Procedural History

         This case began on August 4, 2006, when Awesome Properties filed a complaint against James Christopher seeking an injunction to prohibit the construction of a road underneath the conveyor within an easement owned by Awesome Properties. At that time, Awesome Properties owned industrial property on Goose Pond Island and Christopher owned residential waterfront property on the island. In the judgment, the trial court summarized the first nine years of the proceedings:

"Due to the nature of this case, including multiple parties and several changes in parties-in-interest over time, the litigation has been prolonged. Based on the dismissal and joinder of several parties over the years which necessarily changed the remaining claims and defenses, on December 15, 2014, this Court ordered the current parties to replead their claims and counterclaims, then the Court realigned the parties in its Order dated June 3, 2015."

         After the parties were realigned and had amended their pleadings, the plaintiffs were Christopher and SOUTHBank, FSB, which, as explained infra, purchased some of the property burdened by the easement from Christopher and subsequently assigned its interest in that property to Commonwealth; the defendants were Awesome Properties, Robert Starkey who was the sole member of Awesome Properties, and Fayetteville; and the City of Scottsboro was a third-party defendant. The trial court later granted a motion of Industrial Port and Rail Center of Scottsboro, LLC, to intervene as a defendant.

         The following largely undisputed facts summarized in the trial court's judgment are based on the stipulated facts and deeds jointly submitted by the parties:

"1. The properties involved in this case are situated on Goose Pond Island.
"2. In or about 1969, Revere Copper & Brass, Inc. ('Revere') constructed a barge unloading facility and industrial conveyor system for the purpose of conveying alumina from barges on the Tennessee River to its reduction plant on real property in the middle of Goose Pond Island, where the alumina was converted to aluminum. Revere operated the barge unloading facility and industrial conveyor system in this manner until 1982, when Revere ceased operations on Goose Pond Island.
"3. For some time before, during, and after Revere operated on Goose Pond Island, the real property upon which Revere's facilities were located was owned by the Industrial Development Board of the City of Scottsboro (the 'IDB'). All of the relevant real properties on Goose Pond Island owned by the parties in this case trace back to the IDB.
"The Defendants' Property:
"4. In 1987, about five years after Revere closed, the IDB divided its real property and conveyed the industrial property that was the former site of the Revere reduction plant and a non-exclusive easement to Scottsboro Development Corporation ('SDC'). The deed for this conveyance includes the first reference to a non-exclusive easement which was 'for the existing access road and conveyor to the barge unloading facility...' (the 'Easement').
"5. In 2006, SDC sold the industrial property and the Easement to Awesome Properties, LLC ('Awesome Properties'). Awesome Properties executed a mortgage in favor of Peoples Independent Bank, which was ultimately assigned to Fayetteville Holdings, LLC ('Fayetteville Holdings'). At the time of trial and after several foreclosures, Fayetteville Holdings owned the majority of the former Revere site, and Awesome Properties, LLC owned smaller portions of it. Following trial, Fayetteville Holdings assigned Awesome Properties' debt to FH Holdings, LLC, which foreclosed on Awesome Properties' remaining property. FH Holdings, LLC then conveyed all interest in the Easement and this litigation back to Fayetteville Holdings, so that Fayetteville Holdings is the only remaining party in this litigation with current ownership of industrial property and the Easement.
"6. The Industrial Port and Rail Center of Scottsboro, LLC has a lease with an option to buy Fayetteville Holdings' interest in the property.
"The Plaintiffs' Property:
"7. In 2003, the City of Scottsboro purchased the property that was burdened by the Easement and the City purchased the property subject to the Easement.
"8. In 2005, the City of Scottsboro conveyed two tracts of property on Goose Pond Island to Plaintiff James Christopher. One tract contains the servient tenement. Importantly, the deed to it states that the conveyance is subject to 'an easement for an Existing Access Road and Conveyor to Barge Unloading Facility consisting of approximately 11.88 acres.' The other adjacent tract was also deeded to James Christopher subject to the Easement.
"9. During the course of this litigation, there were some additional conveyances between James Christopher, Goose Pond Development Group, and SOUTHBank regarding property on Goose Pond Island burdened by the Easement. Each relevant conveyance was made subject to the Easement. As of the time of the trial, James Christopher ('Christopher') and SOUTHBank, FSB owned property adjacent to the former Revere site. (After trial, SOUTHBank, FSB assigned its interest in the real property and this litigation to Commonwealth Savingshares Corporation ('Commonwealth'), which was substituted for SOUTHBank, FSB by this Court's Order of May 25, 2016. This Judgment will continue to refer to SOUTHBank although it now applies to Commonwealth.)
"10. Beginning at the Tennessee River at the barge unloading facility, the industrial conveyor runs some 4000' together with an access road which generally runs alongside the conveyor, crosses Christopher's property, then crosses SOUTHBank's property (together, about 2300'), and then runs about 1700 more feet on Fayetteville Holdings' property before terminating at a silo. The balance of the land burdened by the easement is wooded and undeveloped.
"11. This case involves a dispute about the Easement involving the conveyor, the access road, and the barge facility."

         In the judgment, the trial court summarized the repleaded claims and the subsequent proceedings as follows:

"2. Plaintiff SOUTHBanks' Amended Complaint against Defendants Fayetteville Holdings, Awesome Properties, and Robert Starkey requested declaratory relief, and asked this Court to determine whether Fayetteville Holdings had an Easement over its property for the conveyor and access road, and whether the conveyor should be removed. SOUTHBank claimed that the conveyor was abandoned, that Fayetteville does not own the barge terminal, and that the continued existence and use of the Easement violated City zoning. SOUTHBank also alleged that the continued use of the Easement constituted trespass and a nuisance. ...

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