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Clarke v. Tannin, Inc.

United States District Court, S.D. Alabama, Southern Division

March 14, 2018

KENDALL CLARKE, et al., Plaintiffs,
v.
TANNIN, INC., et al., Defendants.

          ORDER

          WILLIAM H. STEELE UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the defendants' motions for summary judgment. (Docs. 111-16). The parties have filed briefs and evidentiary materials in support of their respective positions, (Docs. 111-16, 120-30, 132), and the motions are ripe for resolution. After careful consideration, the Court concludes the motions are due to be granted in part and denied in part.

         BACKGROUND

         The remaining defendants are Tannin, Inc. (“Tannin”) and George Gounares, the owner of Tannin.[1] The remaining plaintiffs[2] are five couples and two individuals, [3] all purchasers of property in the development known as the Village of Tannin (“the Village”). The Village lies just north of, and adjacent to, Highway 182 in Orange Beach, Alabama. The Gulf of Mexico (“the Gulf”) is south of Highway 182. According to the complaint, (Doc. 1), the defendants represented to the plaintiffs that, by purchasing land in the Village, they would have deeded access to the Gulf via a 41-foot-wide strip of land (“the Parcel”) extending from the south side of Highway 182 to the Gulf. These representations were made repeatedly from 1989 to 2015, during which time the plaintiffs enjoyed unfettered beach access via the Parcel, including vehicular access. In July 2015, the defendants placed a locked gate across the northern end of the Parcel and thereafter limited the plaintiffs' beach access to foot traffic. When Village property owners complained, the defendants responded that they (the defendants) owned the Parcel, that no Village property owner had been conveyed deeded access to the Parcel, and that, prior to a May 2015 Grant of Right to Use Land (“the Grant”), the defendants had merely permitted owners to use the Parcel for beach access. The Grant purported to vest the Village of Tannin Association (“the Association”) with a right of access to a five-foot width of the Parcel extending the full length of the Parcel.

         The plaintiffs “bring this litigation to acquire the access rights they were promised, and to recover money damages for the Tannin Defendants' false and misleading sales practices.” (Doc. 1 at 5). The complaint includes six causes of action: (1) Interstate Land Sales Full Disclosure Act (“ILSA”); (2) declaratory judgment; (3) easement by prescription; (4) fraud; (5) breach of warranty; and (6) breach of fiduciary duty. The defendants seek summary judgment as to all claims.[4]

         DISCUSSION

         Summary judgment should be granted only if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The party seeking summary judgment bears “the initial burden to show the district court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The moving party may meet its burden in either of two ways: (1) by “negating an element of the non-moving party's claim”; or (2) by “point[ing] to materials on file that demonstrate that the party bearing the burden of proof at trial will not be able to meet that burden.” Id. “Even after Celotex it is never enough simply to state that the non-moving party cannot meet its burden at trial.” Id.; accord Mullins v. Crowell, 228 F.3d 1305, 1313 (11th Cir. 2000); Sammons v. Taylor, 967 F.2d 1533, 1538 (11th Cir. 1992).

         “When the moving party has the burden of proof at trial, that party must show affirmatively the absence of a genuine issue of material fact: it must support its motion with credible evidence ... that would entitle it to a directed verdict if not controverted at trial. [citation omitted] In other words, the moving party must show that, on all the essential elements of its case on which it bears the burden of proof, no reasonable jury could find for the nonmoving party.” United States v. Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 1991) (en banc) (emphasis in original); accord Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir. 1993).

         “If the party moving for summary judgment fails to discharge the initial burden, then the motion must be denied and the court need not consider what, if any, showing the non-movant has made.” Fitzpatrick, 2 F.3d at 1116; accord Mullins, 228 F.3d at 1313; Clark, 929 F.2d at 608.

         “If, however, the movant carries the initial summary judgment burden ..., the responsibility then devolves upon the non-movant to show the existence of a genuine issue of material fact.” Fitzpatrick, 2 F.3d at 1116. “If the nonmoving party fails to make ‘a sufficient showing on an essential element of her case with respect to which she has the burden of proof, ' the moving party is entitled to summary judgment.” Clark, 929 F.2d at 608 (quoting Celotex Corp. v. Catrett, 477 U.S. 317 (1986)) (footnote omitted); see also Fed. R. Civ. P. 56(e)(2) (“If a party fails to properly support an assertion of fact or fails to properly address another party's assertion of fact as required by Rule 56(c), the court may … consider the fact undisputed for purposes of the motion ….”).

         In deciding a motion for summary judgment, “[t]he evidence, and all reasonable inferences, must be viewed in the light most favorable to the nonmovant ….” McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1243 (11th Cir. 2003). “Therefore, the plaintiff's version of the facts (to the extent supported by the record) controls, though that version can be supplemented by additional material cited by the defendants and not in tension with the plaintiff's version.” Rachel v. City of Mobile, 112 F.Supp.3d 1263, 1274 (S.D. Ala. 2015), aff'd, 633 Fed.Appx. 784 (11th Cir. 2016).

         There is no burden on the Court to identify unreferenced evidence supporting a party's position.[5] Accordingly, the Court limits its review to the exhibits, and to the specific portions of the exhibits, to which the parties have expressly cited. Likewise, “[t]here is no burden upon the district court to distill every potential argument that could be made based upon the materials before it on summary judgment.” Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 599 (11th Cir. 1995); accord Gennusa v. Canova, 748 F.3d 1103, 1116 (11th Cir. 2014). The Court accordingly limits its review to those arguments the parties have expressly advanced.

         The plaintiffs identify Counts Two, Three and Five as designed to establish that the defendants have no legal authority to restrict their beach access, with Counts One, Four and Six arguing for relief in the event the defendants do possess such authority. (Doc. 120 at 2). The Court therefore addresses first the claims challenging the defendants' ability to restrict the plaintiffs' use of the Parcel.

         It is uncontroverted that the owner of record of the Parcel has at all relevant times been Tannin. It is also uncontroverted that the only relevant transfer of record of any interest in the Parcel is the May 2015 Grant from Tannin to the Association, which is limited to a five-foot swath. The plaintiffs nevertheless maintain that they possess a legally protected property interest in the entirety of the Parcel, which interest precludes the defendants from cutting off their vehicular access to the Parcel.

         I. Count Two - Declaratory Judgment.

         The plaintiffs base their demand for declaratory relief on three legal theories: common-law dedication, dedication by estoppel, and “scheme of development.” (Doc. 1 at 15; Doc. 121 at 1). As discussed below, the defendants are entitled to summary judgment as to all three theories and thus as to Count Two in toto.

         A. Common-Law Dedication.

         “A ‘dedication' is a donation or appropriation of property to the public use by the owner.” Ritchey v. Dalgo, 514 So.2d 808, 810 (Ala. 1987) (internal quotes omitted). Common-law dedication “is accomplished when there have been acts which evidence an unequivocal intent by the owner to dedicate the property to a public use and an acceptance by the members of the public of the property for that public use.” Id. (emphasis in original).

         “The public is a necessary party to any dedication, there being no such thing as a dedication to an individual.” Ritchey, 514 So.2d at 810 (internal quotes omitted). Indeed, and as the plaintiffs concede, “there is no such thing as a dedication to … a limited group of persons.” (Doc. 121 at 4). Rather, a dedication “must be for the benefit of the public, and not for any particular part of it.” Stringer Realty Co. v. City of Gadsden, 53 So.2d 617, 619 (Ala. 1951) (internal quotes omitted). That is, “the essence of a dedication to public uses is that it shall be for the use of the public at large.” Id. (emphasis added, internal quotes omitted). Again the plaintiffs concur, acknowledging that dedication must be to “the general public.” (Doc. 121 at 4).

         Alabama cases have repeatedly emphasized that dedication cannot work in favor of a select subset of the public at large, such as those who purchase nearby property from a common owner. According to Stringer Realty, “a grant by the owner of a private right of way over his lands to buyers of different parcels of the same to furnish them with convenient access to the street is no dedication to public use.” 53 So.2d at 619 (internal quotes omitted). According to Trustees of Howard College v. McNabb, 263 So.2d 664 (Ala. 1972), a valid dedication of land as a public park or parkway “must be for the benefit of the public at large, and open for the use and enjoyment of everyone, rather than for the use of those few individuals who own the adjoining property, ” such that “the private nature of the alleged rights granted [to adjoining landowners only] precludes a finding that this property has been dedicated as a public park.” Id. at 671-72. And according to Garland v. Clark, 88 So.2d 367 (Ala. 1956), there was no dedication to the public of a parking area adjoining a non-public, church cemetery when only those owning cemetery lots or with other permission to use a cemetery lot used the parking area. Id. at 370-71; accord Ledlow v. City of Pell City, 497 So.2d 86, 88 (Ala. 1986) (“The dedication of property as a public cemetery requires an intention to devote the property to the public at large ….”) (citing Garland).

         As the defendants note, (Doc. 112 at 2-4), the plaintiffs have no evidence that the defendants intended to open the Parcel to use by the public at large. Their evidence is, at best, that the defendants authorized only the plaintiffs, other Village property owners, and a select few others to use the Parcel. There is not a shred of evidence that the defendants intended to, or did, authorize the public at large to use the Parcel. On the contrary, the plaintiffs agree that the defendants took pains to prevent the public at large from using the Parcel, keeping it fenced on both sides and with signs at the northern (highway) end proclaiming the Parcel to be “private property” for use by Tannin or the Village only and at the southern (beach) end announcing “private beach.” (Doc. 111-17 at 10; Doc. 111-21 at 23; Doc. 111-22 at 8; Doc. 112-3; Doc. 112-5). As the cases discussed above reflect, such evidence is patently insufficient to support a common-law dedication. See Stringer Realty, 53 So.2d at 619 (“To describe a tract of land as ‘Private Park' appears to indicate the opposite of public use.”).

         The plaintiffs note that the plat of the Village (“the Plat”) depicts the Parcel and labels it as “Beach Access.” (Doc. 111-31 at 1, 3). This language, they say, “correspond[s] with” the phrases, “Sand Beach” and “community beach” used on the plats of the property at issue in Ritchey, where the Court found the evidence sufficient to support a common-law dedication. (Doc. 121 at 6). The Ritchey Court, however, did not rely on the term “sand beach” as indicating an intent to dedicate the area to the public at large. 514 So.2d at 813. While the Court did rely on the “community beach” language, id., that adjective on its face connotes access by the public. In contrast, the term “beach access” does nothing to identify who has such access and, in the context of a plat of the Village, it could hardly be read to mean anything other than access by Village property owners.

         This obvious conclusion is only bolstered by the plaintiffs' reliance on the language of the Village declaration (“the Declaration”) for its “corresponding” statement, (Doc. 121 at 8), that “Tannin is near the Gulf of Mexico and has access to it.” (Doc. 111-30 at 5). Reading the Declaration in conjunction with the Plat, as the plaintiffs demand, renders it inescapable that the “beach access” mentioned in the Plat is the “access” of “Tannin, ” not the public at large.

         As noted, to sustain a common-law dedication, the evidence of the defendants' intent to dedicate the Parcel to the public at large must be “unequivocal.” This is not a low threshold. “To establish a dedication, the clearest intention on the part of the owner to that effect must be shown, and the evidence must be clear and cogent, and the acts of the owner relied on to establish a dedication must be unequivocal in their indication of the owner's intention to create a public right exclusive of his own.” Trustees, 263 So.2d at 670 (emphasis added, internal quotes omitted). The plaintiffs' evidence does not come close to meeting this demanding standard, and no properly functioning jury could find it satisfied.

         B. Dedication by Estoppel.

         The plaintiffs quote from Ritchey regarding “the role of estoppel as that doctrine applies in common law dedication cases, ” and they conclude that, “[u]nder the facts as presented, Defendants should be estopped … from … restricting the Plaintiffs' use of the … Parcel.” (Doc. 121 at 7). Ritchey did not apply an estoppel theory, and it explained neither how such an estoppel arises nor the relation of estoppel to dedication based on the owner's conduct as discussed in Part I.A. However, Ritchey quoted from Sam Raine Construction Co. v. Lakeview Estates, Inc., 407 So.2d 542 (Ala. 1981), which addresses these issues in more detail.

         Sam Raine considered whether there was sufficient evidence to reach a jury that a particular road had become a public way. This can occur in any of three ways: a regular proceeding for that purpose, general use by the public for twenty years, or “by a dedication as such by the owner of the land the way crosses, with acceptance by the proper authorities.” 407 So.2d at 544. The evidence ruled out the first two possibilities, leaving the plaintiff to show a common-law dedication. Id. Citing Trustees, the Court acknowledged that, “to constitute a dedication at common law, there must of course be an intention of the owner to dedicate the property ….” Id. at 548. The Court also acknowledged that “[t]he owner must unequivocally intend to create a public right exclusive of his own.” Id. at 544 (emphasis added, internal quotes omitted).

         The Sam Raine Court then identified common-law dedications as “either expressed or implied, ” with the latter “aris[ing] when the acts or conduct of the owner are deemed to intend a dedication to the public use, such an implication being founded on the doctrine of estoppel in pais rather than by estoppel in grant.” Id. “Once the public accepts the dedication by its use of the land, the owner will be estopped to deny the dedication without a clear showing that his acts were erroneously construed as intending to dedicate.” Id. at 544-45. As to what acts or conduct by the owner suffice to support an estoppel, the Court turned to a 1903 decision from Kentucky, which indicates that, “[i]f … the owner suffers the public to use the passway, knowing it is claiming it as a matter of right, the law presumes a dedication to the public, and presumes the dedicator's intention to be in accord with the public's use, ” regardless of “whether there has been in fact an actual dedication to the public.” Id. at 545 (internal quotes omitted). The idea is that if the owner “suffer[s] the public generally to so use his land as a passway, under a notorious claim of right, for a great length of time, ” such that persons have paid an enhanced price for nearby property on the understanding the way is public, it would be unfair for the owner to disappoint their understanding. Id. (internal quotes omitted).

         As far as the Court can determine, only Ritchey has cited Sam Raine's discussion of estoppel, and Ritchey does not elucidate Sam Raine's meaning or application. Nor have the parties done so. The Court finds Sam Raine to be subject to multiple interpretations, but neither of them assists the plaintiffs. If Sam Raine is a gloss on Trustees and the other cases discussed in Part I.A, then no estoppel arises unless the plaintiffs first demonstrate the defendants' unequivocal intent to dedicate the Parcel to the public at large. Because, as discussed above, the plaintiffs cannot do so, no estoppel to deny a dedication can arise.

         The other possibility is that Sam Raine recognizes an additional method of showing a common-law dedication, one in which the owner's intent to dedicate his property to public use need not be shown unequivocally by his own acts and conduct but can be presumed simply by his passive failure to respond to the public's open and notorious use of his property under a claim of right. The plaintiffs, however, identify no evidence that the general public has used the Parcel openly, notoriously and under a claim of right; on the contrary, they insist the Parcel has at all times been for the exclusive use of Village owners and a few select others. (Doc. 111-16 at 4-5, 7-8; Doc. 111-17 at 14-16; Doc. 111-19 at 13; Doc. 111-21 at 9, 18-19; Doc. 112-3).

         Nor is there evidence of the defendants' passive acquiescence in any (undemonstrated) public use, as there was in Sam Raine. A jury issue was raised in Sam Raine based on: (1) the county's performance of maintenance work on the road in question; (2) the owner's failure to pay for a public water system installed along the road by a water and fire protection authority; (3) the owner's failure to ever stop anyone from freely traveling the road; and (4) the absence of any sign declaring the road to be private. 407 So.2d at 545. The plaintiffs identify no evidence that anyone other than the defendants has maintained or improved the Parcel, and it is uncontroverted that only Tannin did so. (Doc. 111-39 at 2-3). It is further uncontroverted that the defendants fenced off both sides of the Parcel and posted signs at both ends warning the public that the Parcel was private. The plaintiffs make no assertion that the defendants have never affirmatively stopped any member of the general public from using the Parcel and, without proof (which they do not offer) that the general public routinely used the Parcel, it is difficult to see how a failure to post guards at the Parcel or to take other extreme measures could amount to passive acquiescence.

         Finally, an estoppel under Sam Raine would require proof, not merely of unimpeded use of the Parcel by the public at large, but a resulting increase in surrounding property values based on the Parcel's availability to the general public. The plaintiffs do not even suggest that this has occurred.

         As noted, the Court will not manufacture or support arguments on behalf of the litigants, and the plaintiffs' failure to support their conclusory invocation of estoppel places no burden on the Court to supply the deficiency.

         C. Scheme of Development.

         According to the complaint, “when a subdivision is platted and a lot in the subdivision is conveyed with reference to that plat, any landowner in the subdivision has the right to enforce the scheme of development shown on the plat.” (Doc. 1 at 15). The actual rule, as expressed by the cases on which the plaintiffs rely, is somewhat more limited.

         “It is well settled … that where a person plats land and lays off lots according to such plat and makes sale of one or more of such lots with reference thereto, he irrevocably dedicates the land designated thereon as streets, alleys, avenues, and highways to the public for public uses ….” Whitten v. Ferster, 384 So.2d 88, 88 (Ala. 1980) (emphasis added, internal quotes omitted). Once this has occurred, “[e]very purchaser of a lot shown on the recorded map of the subdivision has the right, as against the dedicator of the streets and the purchasers of the other lots, to have the designated scheme of public thoroughfares maintained in its integrity, as it existed when he purchased the property, and all persons whosoever may use these public ways as the occasion requires.” Booth v. Montrose Cemetery Association, 387 So.2d 774, 777 (Ala. 1980) (emphasis added).

         This line of cases represents a particular application of the rule that an owner's intent to dedicate land to the general public must be unequivocally manifested by his acts. Booth, 387 So.2d at 777 n.1. Such an intention may be unequivocal when the owner records a plat that “designates” areas as “unrestricted” streets, as the plaintiffs' cited cases reflect. Id. at 777 & n.1; Cottage Hill Land Corp. v. City of Mobile, 443 So.2d 1201, 1202 (Ala. 1983); Whitten, 384 So.2d at 88; Snead v. Tatum, 25 So.2d 162, 162 (Ala. 1946); Thetford v. Town of Cloverdale, 115 So. 165, 167 (Ala. 1927); Highland Realty Co. v. Avondale Land Co., 56 So. 716, 718 (Ala. 1911). The recorded Plat in this case, however, does not designate the Parcel as a street or other thoroughfare; instead, the Parcel is labeled blandly as “beach access.” (Doc. 111-31 at 1, 3). The plaintiffs - who devote no argument to this section but simply quote from two cases and string cite others - do not address this inconvenient fact.

         The Court is aware that an adequate designation may sometimes be shown “without the designation eo nomine of the space as a street, highway or alley” but “from the situation created by the relative location of blank spaces and lots or blocks and from the purpose to which the lots or blocks are expected to be devoted and from the lines and courses indicated by the map as they relate to lines of the subdivisions made.” East Birmingham Realty Co. v. Birmingham Machine & Foundry Co., 49 So. 448, 451 (Ala. 1909). While the plaintiffs included East Birmingham Realty in their string citation, they presented no argument based on it, or even an explanation of its relevance. (Doc. 121 at 12). The Court has and expresses no opinion whether East Birmingham Realty would have aided the plaintiffs had they articulated any argument drawn therefrom; as noted previously, the Court will not construct arguments on behalf of the parties that they have elected not to present themselves.[6]

         II. Count Three -Easement by Prescription.

         “To establish an easement by prescription, the claimant must use the premises over which the easement is claimed for a period of twenty years or more, adversely to the owner of the premises, under claim of right, exclusive, continuous, and uninterrupted, with actual or presumptive knowledge of the owner.” Bull v. Salsman, 435 So.2d 27, 29 (Ala. 1983). As the defendants point out, (Doc. 113 at 2), seven plaintiffs cannot satisfy the 20-year requirement.[7] The plaintiffs do not contest the point.

         The parties agree that “permissively” is the antonym of “adversely, ” but they disagree who bears the burden regarding this element. The defendants quote Bull for the proposition that “[t]he presumption is that the use is permissive, and the claimant has the burden of proving that the use was adverse to the owner.” 435 So.2d at 29. The plaintiffs counter with Thomas v. City of Rainsville, 502 So.2d 346 (Ala. 1987), for the proposition that “an open, defined roadway, through reclaimed land, in continuous use by the public as a highway without let or hindrance for a period of twenty years becomes a public highway by prescription, ” with the burden “then on the landowner to show the user was permissive only.” Id. at 348 (internal quotes omitted).

         As the defendants point out, (Doc. 128 at 2-3), the cause of action set forth in Count Three is expressly limited to “easement by prescription.” (Doc. 1 at 15). Further, the relief sought is expressly limited to the establishment of an easement by prescription in favor of the plaintiffs only. (Id. at 16). As the defendants also point out, Thomas and the other cases on which the plaintiffs rely do not involve easement by prescription but dedication by prescription. 502 So.2d at 347. As with other forms of dedication, dedication by prescription cannot run in favor of individuals but only in favor of the public at large. Id. (“general use by the public” for a sufficiently long and adverse period results in a “public highway by prescription”). The Court agrees with the defendants that the plaintiffs cannot by brief expand their complaint to encompass a claim for dedication by prescription. E.g., Dukes v. Deaton, 852 F.3d 1035, 1046 (11th Cir. 2017) (“A plaintiff may not amend her complaint through argument in a brief opposing summary judgment.”) (internal quotes omitted).

         The question remains whether the defendants have carried their threshold burden on motion for summary judgment of showing either that the plaintiffs' use of the Parcel was permissive or that the plaintiffs cannot prove otherwise. The Plat satisfies the defendants' burden by negating adverse use: in publicly identifying the Parcel as “beach access, ” the Plat unmistakably reflects the defendants' permission for the plaintiffs and other Village owners to use the Parcel for that purpose.

         The plaintiffs offer no adequate response. Legally, they advance a presumption of adverse use, (Doc. 122 at 6-8), but the Court has demonstrated the presumption does not apply in this case. Factually, they direct the Court to “[t]he testimony of adverse use cited above, ” (id. at 8), but the deposition excerpts to which they cite directly refute the proposition when they address it at all. (Id. at 2-5).[8] Finally, they suggest the defendants have admitted they own no interest in the Parcel, such that they could not give permission to use the Parcel, such that the plaintiffs' use of the Parcel must have been adverse. (Id. at 8). If, however, the defendants have no interest in the Parcel, it is impossible for any plaintiff to obtain an easement by prescription. “Without having first determined who owned the driveway, the trial court could not have granted either party … an easement by prescription in the driveway, because in order to establish an easement by prescription, use of the disputed area must be adverse to the owner [and] with knowledge of the owner.” Coleman v. Kilpatrick, 824 So.2d 788, 791 (Ala. Civ. App. 2001) (emphasis in original); accord Hanks v. Spann, 990 So.2d 399, 403 (Ala. Civ. App. 2008).

         Because the defendants have met their initial burden, and because the plaintiffs have failed to present any evidence that their use of the Parcel was adverse to the defendants (or, as to seven plaintiffs, that they used the Parcel for 20 years), the defendants are entitled to summary judgment as to Count Three.

         III. Count Five - ...


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