Ex parte Booth

Page 648

[Copyrighted Material Omitted]

Page 649

         Marion Circuit Court, CV-17-900134.

         Thomas A. Woodall and R. Ryan Daugherty of Sirote & Permutt, P.C., Birmingham, for petitioner.

          T. Kelly May, H. Cannon Lawley, and William Thompson of Huie, Fernambucq & Stewart, LLP, Birmingham, for respondent.

         STEWART, Justice.

         S. Mark Booth petitions this Court for a writ of mandamus directing the Marion Circuit Court ("the trial court") to dismiss an action filed against him by the City of

Page 650

Guin ("the City"). We grant the petition in part, deny it in part, and issue the writ.

         Background

         On January 17, 2008, Booth and the City entered into a contract entitled "Commercial Development Agreement" ("the agreement"). The agreement provided that the City would sell Booth approximately 40 acres of real property located in Marion County at a price of $5,000 per acre. Booth, in turn, promised to subdivide the property into lots for commercial development. The agreement included a provision granting the City the right to repurchase the property should Booth fail to develop the land within three years following the execution of the agreement. Section 4.4 of the agreement, which set forth the duration of the agreement, stated:

"(a) The covenants in this Agreement shall not terminate until they have been fully performed or have expired by their terms. All covenants, representations, and warranties shall survive the closing of this Agreement and the delivery of any deeds.

"(b) [Booth] agrees that [he] will proceed diligently to develop the Site. In the event that the construction of at least one commercial facility is not completed on the Site within three (3) years from the Effective Date of this Agreement, then, and in such event, the City may exercise its option, herein granted, to purchase all portions of the Site then still owned by [Booth] or any affiliate thereof at and for a purchase price of $5,000 per acre, prorated for portions of an acre."

         The agreement became effective on January 17, 2008, the date it was executed by both parties. In January 2008, the City purportedly executed a statutory warranty deed conveying the property to Booth.^[1]

         On December 11, 2017, the City sued Booth, asserting a claim for specific performance under Section 4.4(b) of the agreement and referring to that section as "an option to repurchase" the property. The City alleged that Booth had failed to construct at least one commercial facility on the property within three years from the effective date of the agreement. The City alleged that it had "timely tendered the purchase price to [Booth] and requested a conveyance of the real property described in the contract but [that Booth] refused to accept the tender or to make the conveyance."

         On January 7, 2018, Booth filed a motion to dismiss the City's complaint pursuant to Rule 12, Ala. R. Civ. P., arguing that, although he had fulfilled his obligations under the agreement by developing a hotel on the property,^[2] the City's complaint seeking to specifically enforce the repurchase of the property pursuant to its option to repurchase in Section 4.4(b) of the agreement was time-barred by the two-year statutory limitations period for such options in § 35-4-76(a), Ala. Code 1975. On January 19, 2018, the trial court entered

Page 651

an order setting Booth's motion to dismiss for a hearing to be held on June 27, 2018.

         On June 11, 2018, the City filed an amended complaint in which it restated verbatim its claim for specific performance of Section 4.4(b) and asserted additional claims against Booth of rescission, fraud, and breach of contract. The City's rescission claim consisted of a single statement in which the City alleged that it, "being a municipal corporation, did not possess lawful authority to dispose of real property to [Booth]." Regarding the fraud claim, the City alleged that it had detrimentally relied on Booth's allegedly false assurances in the agreement that he would "proceed diligently" toward the commercial development of the property and that Booth "failed to construct a commercial facility upon the site since taking title in 2008. Due to that failure, [the City] has elected to exercise its right of repurchase, but [Booth] has failed and refused to grant said right of repurchase, even though [the City] has tendered the purchase price." As to the breach-of-contract claim, the City alleged that Booth "has breached the agreement by failing to construct at least one commercial facility within three (3) years from January 17, 2008. [The City] has offered to purchase all portions of the site owned by [Booth], which [Booth] has refused."

         On June 24, 2018, Booth filed a motion to dismiss the City's amended complaint pursuant to Rule 12 in which he incorporated the arguments he made in the motion to dismiss the original complaint regarding the City's specific-performance claim. He also requested dismissal of the City's fraud and breach-of-contract claims on the ground that those claims were time-barred by the applicable statute of limitations. He further sought dismissal of the City's rescission claim on the ground that the City possessed the legal authority under the law to sell and convey real property. On June 25, 2018, the trial court set Booth's second motion to dismiss for a hearing to be held on June 27, 2018, the same date the trial court had set to hear Booth's motion to dismiss the original complaint. On August 13, 2018, the trial court entered an order denying Booth's motion to dismiss. Booth filed a timely petition for a writ of mandamus with this Court.

         Standard of Review

         A writ of mandamus is an extraordinary remedy available only when the petitioner can demonstrate: "`(1) a clear legal right to the order sought; (2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; (3) the lack of another adequate remedy; and (4) the properly invoked jurisdiction of the court.'" Ex parte Nall, 879 So.2d 541, 543 (Ala. 2003) (quoting Ex parte BOC Grp., Inc., 823 So.2d 1270, 1272 (Ala. 2001)).

         Analysis

         Booth contends that Section 4.4(b) of the agreement contains an option reserved by the City to repurchase the property and that the City's claim for specific performance of Section 4.4(b) was filed after the expiration of the two-year statute-of-limitations period for enforcing option contracts under § 35-4-76(a). Booth also argues that the City's fraud and breach-of-contract claims are time-barred by § 6-2-38( l ) and § 6-2-34, respectively. Booth further contends that the City's claim for rescission is due to be dismissed because, he says, the City has authority under Alabama law to enter into contracts for the sale of land. The City asserts that ...