Grant v. Breland Homes, LLC

Citations: 156 So. 3d 391; 2014 WL 2619879; 2014 Ala. LEXIS 89Docket: 1121405

Court: Supreme Court of Alabama; June 13, 2014; Alabama; State Supreme Court

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Mike Grant, Barry Leake, Scott Schumacher, and Diane Schumacher (the plaintiffs) are appealing a summary judgment favoring Breland Homes, LLC, Breland, and D.R. Horton, Inc.-Huntsville (Horton). The appeal is dismissed. The Reserve is a subdivision in Madison County, which includes the Oak Grove community, where all four plaintiffs own homes and are members of the Reserve Subdivision Home Owners’ Association (HOA). Gulf Coast Development, LLC, the original developer, filed the "Declaration of Protective Covenants" on May 12, 2005, establishing that any exterior modifications require prior written approval from an Architectural Review Committee (ARC), which can deny plans for any reason, including aesthetic considerations.

The Declaration allows Gulf Coast to unilaterally amend it and grant deviations from its restrictions as long as these do not adversely affect the title of homeowners. In August 2012, Horton acquired Breland's assets, including lots 13 and 26 in Oak Grove, and submitted construction applications for these lots to the ARC. The ARC rejected the plans for lot 13 on October 10, 2012, citing aesthetic non-compliance and recommended ceasing construction. Horton, claiming prior approval for the same plan, decided to proceed anyway. The HOA's advisory board demanded that Horton cease work on both lots until proper approvals were obtained. The ARC subsequently denied the application for lot 26 on November 2, 2012, for similar aesthetic reasons. On November 5, 2012, Gulf Coast's representative asserted that Horton’s plans complied with the Declaration, stating the proposed homes were larger than the restrictions required.

On November 13, 2012, plaintiffs initiated a lawsuit against Breland, Gulf Coast, and the HOA, seeking a declaration that Gulf Coast lacked the authority to veto the Architectural Review Committee's (ARC) actions and that Breland violated the protective covenants. They requested a temporary restraining order and preliminary injunction to halt Breland's construction on specific lots. On January 3, 2013, Gulf Coast amended the Declaration, stating that the ARC could not approve or disapprove construction on lots owned by Breland or Horton, giving Gulf Coast exclusive authority over such decisions. The plaintiffs later added Horton as a defendant and sought further injunctive relief against him. On February 7, 2013, the trial court denied the plaintiffs' request for injunctive relief, determining that Gulf Coast had the right to amend the Declaration without homeowner consent and could permit deviations from its restrictions. Subsequently, on February 20, 2013, the plaintiffs filed a third amended complaint reiterating their claims and alleging that Gulf Coast's actions constituted civil conspiracy. They sought a permanent injunction to prevent continued construction without ARC oversight. On March 20, 2013, Breland and Horton moved for summary judgment, asserting Gulf Coast's authority to amend the Declaration and grant deviations from its restrictions.

A motion for summary judgment was filed by Gulf Coast, supporting the claims of Breland and Horton, arguing that Gulf Coast acted within its authority regarding the Declaration’s restrictions. The plaintiffs also sought summary judgment against all defendants, but the trial court ruled on July 23, 2013, that there were no genuine issues of material fact and denied the plaintiffs’ motion while granting judgment in favor of the defendants. The plaintiffs subsequently sought relief from this judgment, which was denied, and the trial court certified the summary judgment for Breland and Horton as final under Rule 54(b). 

The plaintiffs appealed, challenging both the denial of their motion for relief and the summary judgment. However, the court concluded that the Rule 54(b) certification was improper, resulting in a lack of jurisdiction for the appeal. According to Alabama Rule of Civil Procedure 54(b), a trial court can only certify a final judgment on fewer than all claims or parties if it explicitly states there is no just reason for delay. The court emphasized that any order that does not meet this requirement remains subject to revision until a final judgment on all claims is entered. Therefore, the appeal was dismissed due to the trial court exceeding its discretion in certifying the judgment as final without sufficient justification.

A trial court improperly certifies a judgment as final under Rule 54(b) when the issues in the certified claim and those in a pending claim are closely linked, risking inconsistent outcomes. This principle is supported by case law, including Schlarb v. Lee and Centennial Associates, which emphasize the inefficiency of piecemeal appellate reviews. In Smith v. Slack Alost Development Services, the court found that overlapping issues between the appeal and the pending claims warranted a single review. The same reasoning applies to the current case, where the appeals involve identical threshold issues regarding Gulf Coast's authority related to construction applications. As the claims are intertwined, the trial court exceeded its discretion in certifying the judgment in favor of Horton and Breland as final under Rule 54(b). Consequently, the appeal is dismissed due to the absence of a final judgment, aligning with the court's policy against fragmented appellate reviews. Additionally, the record indicates the Homeowners Association (HOA) was served and answered the complaint, but no judgment had been entered concerning the claims against it.