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Rioprop Holdings, LLC v. Compass Bank

Alabama Court of Civil Appeals

January 12, 2018

Rioprop Holdings, LLC
v.
Compass Bank et al.

         Appeal from Baldwin Circuit Court (CV-16-900135)

          THOMPSON, PRESIDING JUDGE.

         Rioprop Holdings, LLC ("Rioprop"), appeals from a judgment the Baldwin Circuit Court ("the trial court") entered in favor of Compass Bank ("Compass") and Walter K. Striplin in this action involving a dispute over title to a unit in the Dunes Condominiums in Gulf Shores ("the property").[1] In the judgment, the trial court, among other things, divested Rioprop of any interest it had in the property and determined that Striplin had fee-simple title to the property.

         The record indicates the following. In 2007, Striplin owned the property. Compass held a mortgage on the property. Striplin failed to pay the 2007 property taxes for the property, so on May 27, 2008, the Baldwin County revenue commissioner conducted a tax sale of the property. Plymouth Park Tax Services ("Plymouth") purchased the property for $36, 826.16 at the tax sale. However, Plymouth never took action to obtain possession of the property, and it did not notify Compass of its interest in the property.

         In November 2011, Plymouth obtained a tax deed on the property. It subsequently conveyed its interest in the property to Propel Financial 1, LLC ("Propel"). Joseph Lassen, the in-house counsel for Propel, testified that, in 2014 or 2015, Propel purchased Plymouth and all of its assets, including the property. Lassen said that Rioprop, "which owns our REO [real estate owned] aspect of Propel, is a separate entity that manages the REO, real estate owned properties." On February 4, 2016, Propel filed a civil action ("the action") in the trial court to enforce its interest in the property. During the pendency of the action, Rioprop was substituted for Propel. For ease of reference, we refer to Rioprop when discussing the actions of Plymouth, the tax purchaser, or Propel throughout the remainder of this opinion.

         In its complaint, Rioprop alleged five counts, including a count seeking a declaration that it held an enforceable lien on the property, with priority over all other liens; a count seeking to eject everyone who claimed an interest in the property and to vest possession in Rioprop; a count seeking to quiet title of the property in Rioprop; a count to establish and enforce a tax lien in the event the trial court determined that Rioprop was not entitled to possession; and a count alleging unjust enrichment based on the taxes that Rioprop had paid since purchasing the property in the event that the trial court determined that it was not entitled to possession of the property or to a lien on the property.

         Compass and Striplin filed separate motions to dismiss the ejectment and quiet-title claims on the ground that the applicable limitations period had expired as to those claims. In separate orders dated July 15, 2016, the trial court granted the motions to dismiss those claims. Compass also filed a counterclaim seeking a declaration that Rioprop did not have an interest in the property because, it said, Rioprop was time-barred from seeking possession. Compass further claimed that any interest Rioprop might have had in the property had vested in Striplin, subject to Compass's mortgage.

         On April 17, 2017, an ore tenus hearing was held on the remaining issue of whether Rioprop was entitled to recover the amount it had paid for the property at the tax sale, the accumulated interest on that amount, the amount it had paid for expenses such as property taxes and insurance, and an attorney fee. At the hearing, Lassen testified that the total amount Rioprop claimed was $117, 372.79. On cross-examination, however, Lassen acknowledged that he did not have a copy of the insurance policy or bills for the premiums that had been paid. Lassen also admitted that, other than a "payoff statement" that included a description of the expenses paid in connection with the property, he did not have receipts, copies of checks, or other documents to support Rioprop's claim that it was owed $117, 372.79 or entitled to a lien in that amount. Lassen also testified that Rioprop had never demanded possession of the property from Striplin.

         On May 1, 2017, the trial court entered a judgment in favor of Striplin as to Rioprop's contention that it held an enforceable lien with priority over all other liens on the property. The trial court also denied Rioprop's request to establish and enforce a lien pursuant to §§ 40-10-70 and -76, Ala. Code 1975. As to Rioprop's unjust-enrichment claim against Striplin, the trial court found in favor of Rioprop and ordered Striplin to pay Rioprop $5, 190.36. In addition, the trial court divested Rioprop of any interest it had in the property and vested title of the property in fee simple absolute to Striplin. The trial court then explicitly stated that the judgment had disposed of all matters as to all parties. Rioprop appealed to the Alabama Supreme Court, which transferred the appeal to this court pursuant to § 12-2-7(6), Ala. Code 1975.

         Rioprop argues on appeal that the trial court erred in dismissing its claims for ejectment and to quiet title. In its brief on appeal, Rioprop states that the trial court's order "did not provide any clue as to what legal or factual support upon which [sic] it based it's decision." In their motions to dismiss the ejectment and quiet-title claims, both Compass and Striplin argued that those claims were time-barred.

"'[T]he standard for granting a motion to dismiss based upon the expiration of the statute of limitations is whether the existence of the affirmative defense appears clearly on the face of the pleading. Sims v. Lewis, 374 So.2d 298 (Ala. 1979); Browning v. City of Gadsden, 359 So.2d 361 (Ala. 1978); Wright & Miller, Federal Practice and Procedure, Civil & 1357 [sic], at 605 (1969).'
"Braggs v. Jim Skinner Ford, Inc., 396 So.2d 1055, 1058 (Ala. 1981)."

Treadwell v. Farrow, [Ms. 2160667, Oct. 27, 2017] ___So. 3d___, ___(Ala. Civ. App. 2017).

         Compass and Striplin supported their contention that the ejectment and quiet-title claims were barred by the applicable statute of limitations by citing ...


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