Loxley South, LLC. v. Western Express, Inc.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 11-14009 MAY 31, 2012
________________________ JOHN LEY
CLERK
D.C. Docket No. 1:10-cv-00024-KD-N
LOXLEY SOUTH, L.L.C.,
Plaintiff-Counter Defendant-Appellant,
versus
WESTERN EXPRESS, INC.,
llllllllllllllllllllllllllllllllllllllll Defendant-Counter Claimant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Alabama
_______________________
(May 31, 2012)
Before DUBINA, Chief Judge, EDMONDSON, Circuit Judge, and GOLDBERG,*
Judge.
PER CURIAM:
*
Honorable Richard W. Goldberg, United States Court of International Trade Judge,
sitting by designation.
I. BACKGROUND
This dispute arises from Appellee Western Express’s (“Western”) failure to
construct a road on a parcel of land within six months of closing, as required by its
contract with Appellant Loxley South (“Loxley”). Western Express contends that
the contract was void and unenforceable ab initio because it violated certain
provisions of Alabama law and the Subdivision Regulations of the Town of
Loxley. The district court granted summary judgment to Defendant-Appellee
Western, holding that the contract was void ab initio. Loxley now appeals.
II. STANDARD OF REVIEW
The court has jurisdiction pursuant to 28 U.S.C. § 1332. We review a district
court’s grant of summary judgment de novo. Nat’l Parks Conservation Ass’n v.
Norton, 324 F.3d 1229, 1236 (11th Cir. 2003). Summary judgment is granted if there
is no “genuine dispute as to any material fact.” Fed. R. Civ. P. 56(a).
III. DISCUSSION
The district court held that the contract was unenforceable ab initio because it
violates Alabama law and the Subdivision Regulations of the Town of Loxley
(“Subdivision Regulations”). Both section 3.0 B of the Subdivision Regulations and
Alabama’s Subdivision Control Statutes (“Subdivision Control Statutes”) prohibit
selling land in a proposed subdivision if the subdivision plat has not received final
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approval and has not been recorded in the county probate records. Subdivision
Regulations, § 3.0 B., Ala. Code §11-52-33 (2012) (“section 33”). Further, contracts
that violate the Subdivision Control Statutes are void and unenforceable under
Kilgore Dev. v. Woodland Place, L.L.C., 47 So. 3d 267, 271 (Ala. Civ. App. 2009)
(holding that “a contract obtained in violation of the subdivision control statutes is
void”).
On appeal, Loxley argues that (A) the property at issue is excluded from the
Subdivision Regulations, and (B) even if it is not exempt, the contract is not void
because Kilgore does not apply.
A. The Property Is Not Exempt from the Subdivision Regulations
Section 4.4 B of the Subdivision Regulations states that:
4.4 Applicability: The following shall not be included within the
definition of subdivision or be subject to the requirements thereof:
....
B. The division of land into parcels greater than five (5) acres where no
street construction is involved. Any further division of this original tract
will require recording of a subdivision plat.
(emphasis added).
Thus, exclusion under section 4.4 B has two requirements: (1) that the division
of land results in parcels of greater than five acres; and (2) that street construction is
not involved. Loxley fails to demonstrate that it satisfies either of these two
requirements. Therefore, the property is not excluded from the Subdivision
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Regulations.
First, Loxley improperly characterizes the property described in the contract
as consisting of approximately fifty acres. Appellant Brief at 13–14, 24. The
Subdivision Regulations and the Subdivision Control Statutes specify that
descriptions of metes and bounds in the instrument of transfer will not exempt the
transaction from the relevant penalties. Doc. 71 at 114, Ala. Code §11-52-33. Thus,
Loxley cannot rely on its metes and bounds description as a basis for its assertion
that the transaction involved a parcel of land greater than five acres. Loxley sold
Western seventeen lots in the subdivision, fifteen of which were less than five acres.1
Second, road construction is “involved” in this division of land. If, as here,
subdivision of the land results in parcels with no street access, the Subdivision
Regulations require street construction for the land to be developed. See Subdivision
Regulations, §5.2 B.6. Contrary to Appellant’s assertions, the term “involved” is not
ambiguous. Further, road construction is clearly “involved” here because both the
Subdivision Regulations and the contract between the two parties require road
construction. In fact, Western’s failure to construct the road created the controversy
underlying Loxley’s original complaint.
1
Don Rowe, witness for Appellant, testified that the property sold to Western Express
“consisted of seventeen lots, totaling approximately fify acres.” Doc. 77-3 at 6 (emphasis
added).
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Here, the subdivision of land resulted in parcels of less than five acres.
Moreover, street construction was clearly involved. Therefore, the property is not
excluded from the Subdivision Regulations under section 4.4 B.
B. Kilgore Applies and Renders This Contract Void and Unenforceable
A contract made in violation of section 33 of the Subdivision Control Statutes
is void and unenforceable. Kilgore, 47 So. 3d at 271. Appellant unsuccessfully
attempts to distinguish this situation from Kilgore.
First, Appellant argues that this contract, unlike that at issue in Kilgore, was
an agreement to sell “an entire subdivision.” This characterization is incorrect
because Exhibit A clearly shows that Loxley South sold lots 2–8, 13–17, 20, 23, and
26, but kept the other lots and still owns those lots today. Doc. 89-3 at 24.
Appellant also argues that, unlike the sales in Kilgore, the master plan here had
been approved prior to the execution of the Agreement. See Appellant Brief at 40.
However, this is not accurate because only preliminary approval had been granted.
Under the Subdivision Regulations, the approval must be certified on the plat, and the
Planning Commission and the Town Council must approve the plat. See Subdivision
Regulations, §3.2E. Even after preliminary approval, final inspections are still
required.
Finally, Loxley claims that “unlike the sale at issue in Kilgore, the parties here
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contemplated the future approval of the Loxley Planning Commission of a fully
engineered subdivision plat prior to the sale of any lots [. . . .] within the proposed
subdivision.” Appellant Brief at 40. This is also incorrect. The court in Kilgore
clearly stated that the contract between Kilgore and Woodland Place was conditional
upon, and required, the future approval and recording of the subdivision. Kilgore, 47
So. 3d at 268.
Like Kilgore, this case involves an agreement to sell various lots within a
subdivision; the master plan had not been approved prior to the sale; and the contract
was conditional upon future approval of the subdivision. Therefore, Kilgore applies
here and because the contract violates section 33 of the Subdivision Control Statutes,
it is also void and unenforceable.
IV. CONCLUSION
The Court AFFIRMS the district court’s order.
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