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The Crest Homeowners Association, Inc. v. Onsite Wastewater Maintenance, LLC

Alabama Court of Civil Appeals

May 17, 2019

The Crest Homeowners Association, Inc.
v.
Onsite Wastewater Maintenance, LLC

          Appeal from Jefferson Circuit Court (CV-15-903424)

          EDWARDS, JUDGE

         The Crest Homeowners Association, Inc. ("TCHA"), appeals from a judgment entered by the Jefferson Circuit Court disposing of TCHA's claims against Onsite Wastewater Maintenance, LLC ("OWM"). The judgment also disposed of TCHA's claims against Integrated Wastewater Management, Inc. ("IWM"), an alleged alter ego of OWM; Keith Hattaway, the sole member and manager of OWM and an alleged shareholder of IWM; David Hereford, an alleged service provider for OWM; and Terry White, an alleged shareholder of IWM. IWM, Hattaway, Hereford, and White will hereinafter be referred to collectively as the "other defendants." TCHA has appealed, challenging only the disposal of its claims against OWM.

         On September 4, 2015, TCHA filed a complaint against OWM and the other defendants in the trial court; the complaint was subsequently amended to correct an error regarding OWM's alleged name. According to TCHA's complaint, as amended, TCHA "is the owner of the private onsite sewage-disposal system that serves The Crest Subdivision located in Trussville, Alabama," and OWM is "the company responsible for the maintenance of [TCHA's] private onsite sewage-disposal system." TCHA alleged that it had entered into a maintenance agreement with OWM and that the maintenance agreement required OWM to make all necessary repairs to the sewage-disposal system. According to TCHA's complaint, OWM and the other defendants failed to fulfill their obligations under the maintenance agreement. TCHA alleged that OWM and the other defendants made "material representations, including statements that all required repairs would be made to the system and that they would perform all necessary maintenance on the onsite sewage disposal system on a monthly basis"; that OWM and the other defendants "willfully, wantonly, fraudulently, mistakenly or recklessly suppressed material facts from [TCHA]"; that OWM and the other defendants breached the maintenance agreement with TCHA; that OWM and the other defendants negligently or wantonly breached the duties they owed to TCHA; that OWM and the other defendants engaged in deceptive trade practices, see Ala. Code 1975, § 8-19-5; and that OWM and the other defendants had created a private nuisance. TCHA sought damages, including the "cost to repair or replace the onsite sewage-disposal system and ... punitive damages." TCHA later filed a witness list, an exhibit list, and an itemization of damages "representing witnesses, exhibits and damages that may or may not be offered into evidence in the trial of this cause" and indicating that the cost of "[c]onsulting, [e]ngineering and installation of [n]ew [s]ystem" was $90, 000.

         OWM filed an answer denying that it had agreed "to make all repairs to the onsite sewage-disposal system and to perform all monthly maintenance service on the onsite sewage disposal system." Instead, OWM alleged that it had agreed to perform certain repairs chosen by TCHA and to provide "maintenance service for pump station at the onsite sewage-disposal system ... and 24/7 monitoring for the pump station ... for a total monthly fee of $364.00." OWM denied that it had engaged in any of the alleged wrongful acts alleged in TCHA's complaint. The other defendants likewise filed answers denying the pertinent allegations in TCHA's complaint.

         OWM and the other defendants filed motions for a summary judgment, and TCHA opposed those motions. On November 22, 2016, the trial court entered an order granting Hereford's motion for a summary judgment, but denying the motions for a summary judgment filed by OWM, IWM, Hattaway, and White.

         After an ore tenus proceeding, the trial court entered a final judgment on May 2, 2018. The May 2018 judgment includes extensive findings of fact and specific discussions regarding why OWM was entitled to a judgment in its favor as to TCHA's claims of breach of contract, negligence, and wantonness. The August 2018 judgment further states that "[a]ny and all claims asserted against the Defendants are hereby DISMISSED with prejudice." (Capitalization in original.)

         TCHA timely filed a postjudgment motion, and the trial court denied that motion. TCHA timely filed a notice of appeal to the Alabama Supreme Court, which transferred the appeal to this court, pursuant to § 12-2-7(6), Ala. Code 1975.

         TCHA argues that the trial court erred in determining that OWM did not breach the maintenance agreement and in dismissing TCHA's fraud claim and denying its wantonness claim. Regarding the denial of TCHA's claim alleging breach of the maintenance agreement, TCHA argues that "(a) the trial court contravened Alabama law by looking beyond the four corners of the agreement; (b) the trial court contravened Alabama law by failing to follow the rules for resolving ambiguities in contracts; and (c) the trial court's determination was not supported by its own stated findings of facts."

         In the May 2018 judgment, the trial court stated that the sewage-disposal system at issue consisted of "thirteen (13) septic tanks (one for each home), two (2) lift pumps, four (4) peat filtration treatment tanks, and field lines." The trial court continued:

"In 2011, [TCHA] contacted [OWM] to address an alarm on the [sewage-disposal] system. [OWM] provided [TCHA] with a proposal to make the necessary repairs, and [TCHA] paid [OWM] for those repairs. [TCHA] also requested a proposal from [OWM] to provide ongoing maintenance for the entire [sewage-disposal] system. [OWM] submitted a proposal to provide 'Monthly maintance [sic] service treatment system' for $325/month and '24/7 monitoring' for $39/month .... A second option was also provided to [TCHA] called the 'Worry Free Maintenance Contract' that provided pump out service on an as needed basis and a 5-year warranty for a cost of $624/month, but with no additional services. ...
"....
"... The optional services available was the maintaining of the septic pump outs, which would be reviewed on the completion of drain issues and control upgrades. These options were not selected by [TCHA]. To the contrary, [TCHA] specifically informed [OWM] that it did not have the ...

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