Title: Wilcox Investment Group, LLC et al. v. P&D, LLC
Citation: N/A
Docket Number: 1150025, 1150052
State: Alabama
Issuer: Alabama Supreme Court
Date: September 30, 2016

REL: 09/30/2016
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2016
____________________
1150025
____________________
Wilcox Investment Group, LLC, et al.
v.
P&D, LLC
____________________
1150052
____________________
P&D, LLC
v.
Wilcox Investment Group, LLC, et al.
Appeals from Baldwin Circuit Court
(CV-14-900264 and CV-14-901181)
1150025 and 1150052
PER CURIAM.
Wilcox 
Investment 
Group, 
LLC 
("Wilcox 
Investment"), 
Foley
Investment Partners, LLC ("Foley"), and Wilcox Communities,
LLC 
("Wilcox 
Communities")  
(hereinafter 
collectively 
referred
1
to as "Wilcox"), appeal from a judgment of the Baldwin Circuit
Court awarding P&D, LLC ("P&D"), $122,291 on P&D's claims
alleging the breach of two leases involving two condominium
units formerly owned by P&D.  P&D appeals the trial court's
judgment on the grounds that the damages the trial court
awarded were insufficient and that the trial court erred in
failing to award it attorney fees.  We consolidated the
appeals for the purpose of writing one opinion.
I.  Facts
The genesis of this litigation is a condominium
development in Foley, Alabama, known as Sea Pines of Bon
Secour Condominiums ("the condo project").  The developer of
the condo project was Sea Pines, LLC ("Sea Pines").  Sea Pines
began to develop the condo project in September 2006; plans
called for 84 residential condominium units (21 buildings of
This entity is identified in the complaint as Wilcox
1
Communities, an EPCON Communities Builder.
2
1150025 and 1150052
4 units each), a clubhouse, a pool, and other amenities.  On
September 15, 2006, Sea Pines executed a note with Superior
Bank for a construction and development loan, secured by a
mortgage on the land to be developed.
On September 27, 2007, Sea Pines filed a "Declaration of
Condominium of Sea Pines at Bon Secour, A Condominium" ("the
declaration"), in the Baldwin probate office in accordance
with the Alabama Uniform Condominium Act, Ala. Code 1975,
§§ 35-8A-101 - 35-8A-417 ("the AUCA").  The declaration
included core aspects of the condo project such as the plans
and plats, the condominium association's bylaws, and special
rights reserved to Sea Pines as the developer of the condo
project.  
The AUCA provides, in part:
"(a) The declaration for a condominium must
contain:
"....
"(8) A description of any development
rights specified in Section 35-8A-103(11)
and 
other 
special 
declarant 
rights
specified 
in 
Section 
35-8A-103(24) 
reserved
by the declarant, together with a legally
sufficient description of the real estate
to which each of those rights applies, and
a time limit within which each of those
rights must be exercised...."
3
1150025 and 1150052
§ 35-8A-205(a)(8), Ala. Code 1975 (emphasis added). The AUCA
defines "special declarant rights" as 
"[r]ights reserved for the benefit of a declarant
(i) to complete improvements indicated on plats and
plans 
filed 
with 
the 
declaration 
(Section
35-8A-209); (ii) to exercise any development right
(Section 
35-8A-210); 
(iii) 
to 
maintain 
sales
offices, management offices, signs advertising the
condominium, and models (Section 35-8A-215); (iv) to
use easements through the common elements for the
purpose 
of 
making 
improvements 
within 
the
condominium or within real estate which may be added
to the condominium (Section 35-8A-216); (v) to make
the condominium subject to a master association
(Section 35-8A-220); (vi) or to appoint or remove
any officer of the association or any master
association or any board member during any period of
declarant control (Section 35-8A-303(d))."
§ 35-8A-103(24), Ala. Code 1975 (emphasis added).  Section
35-8A-215, Ala. Code 1975, provides, in part:
"A declarant may maintain sales offices,
management offices, and models in units or on common
elements in the condominium only if the declaration
so provides and specifies the rights of a declarant
with regard to the number, size, location, and
relocation thereof.  Any sales office, management
office, or model not designated a unit by the
declaration is a common element, and if a declarant
ceases to be a unit owner, he ceases to have any
rights with regard thereto unless it is removed
promptly from the condominium in accordance with a
right to remove reserved in the declaration.  ..."
(Emphasis added.)  The Commissioner's Commentary 1 to § 215
further explains:
4
1150025 and 1150052
"This section prescribes the circumstances under
which portions of the condominium -- either units or
common elements -- may be used for sales offices,
management 
offices, 
or 
models. 
 
The 
basic
requirement is that the declarant must describe his
right to maintain such offices in the declaration.
There are no limitations on that right, so that
either units owned by the declarant or other
persons, or the common elements themselves, may be
used for that purpose...."
(Emphasis added.)
The declaration defines "'Developer' or 'Declarant'" as
"Sea Pines, LLC, an Alabama limited liability company, and its
successors and assigns."  § 2.01(M).  Section 5.02 of the
declaration provides:
"Use for Sales Purposes.  All Units and the
Common Elements shall be subject to the statutory
right concerning sales and management offices and
models in Units and the Common Elements in favor of
the Developer allowed by § 35-8A-215 of the [AUCA].
The Developer otherwise expressly reserves the right
to use one (1) or more Units owned by the Developer
for management offices and/or sales and leasing
offices.  The Developer reserves the right to
relocate offices and/or models from time to time
within the Property.  The Developer further reserves
the right to maintain on the Common Elements
advertising signs in any location or locations and
from time to time to relocate and/or remove the
same, all in the sole discretion of the Developer."
(Emphasis added.)  Thus, in accordance with provisions of the
AUCA and the declaration, among the special declarant rights
5
1150025 and 1150052
possessed by Sea Pines was the right to maintain models in
units of the condo project.
By October 2007, Sea Pines had built the clubhouse and
one building of condominiums consisting of four units.  To get
more money released from its construction loan, Sea Pines
needed to sell at least two of those units.  Patty Lee, a
licensed realtor, was the exclusive listing agent for the
condo project.  Keith Clay, Sea Pines' managing agent, made a
proposal to Lee that she in turn shared with Dave Wirtes, an
attorney,  for the sale of two units, which would mutually
2
benefit Sea Pines and Lee and Wirtes.  The proposal involved
Sea Pines selling two units to Lee and Wirtes contingent upon
Lee and Wirtes leasing the units back to Sea Pines to use as
sales models.  Wirtes testified that Clay represented the deal
as one in which "there would be no money out of [Wirtes's]
pocket" and "[at] the end of the buildout of Phase I [of the
condo project] I would own the two units outright."  
3
Wirtes 
had 
been 
Lee's 
attorney 
in 
a 
wrongful-death 
action
2
filed following the death of Lee's husband.  
Wirtes explained:
3
"I mean, frankly, I was footing the financial side
of it in an effort to help Patty.  Patty was working
on commission at Roberts Brothers at Sea Pines.  So
6
1150025 and 1150052
To this end, Lee and Wirtes formed P&D.  On October 28,
2007, P&D executed purchase agreements with Sea Pines for the
purchase of unit 103 for $282,160 and unit 104 for $257,771. 
P&D financed the purchases through First National Bank of
Baldwin County.  On the same day, Sea Pines executed lease
agreements with P&D in which P&D agreed to lease to Sea Pines
unit 103 for $2,200 per month and unit 104 for $2,100 per
month on the condition that Sea Pines "shall use the premises
as a model home for real estate purposes."  The leases stated
that they would terminate on "November 9, 2009, or sale by Sea
Pines, LLC, of final unit of Phase I of project known as Sea
Pines at Bon Secour, whichever is later."   The final
4
paragraph of each of the leases ("paragraph 10") provided:
"10. In the event Sea Pines, LLC, its members,
successors and assigns elect for any reason not to
complete construction of all presently planned units
when units would be sold, she would garner income
but I was the one taking the risk principally on the
personal guarantees [for the loans P&D secured to
purchase the condominium units]."
Wirtes testified that "Phase I" in the leases referred
4
to all 21 buildings of condominium units.  He further
explained that "the Sea Pines principals had an option to
purchase an adjacent 40 acres and it was their hope and
expectation that they would quickly sell these and then go on
and essentially do another mirror development in Phase 2 but,
of course, that never happened."
7
1150025 and 1150052
of Phase I of Sea Pines at Bon Secour, Sea Pines,
LLC, its members, successors or assigns shall, at
the election of P&D, LLC, either a) satisfy all
remaining indebtedness owed at that time by P&D,
LLC, to First National Bank of Baldwin County (or
its successors or assigns) for the purchase price of
the condominium unit that is the subject of this
lease agreement; or b) purchase from P&D, LLC, the
condominium unit that is the subject of this lease
agreement for the sum represented by the last most
recent appraisal of the unit."
On November 16, 2007, Superior Bank issued a "Partial
Release" from its lien on the condo project for units 103 and
104.  On June 8, 2009, the leases were recorded in the Baldwin
probate office.  
On August 31, 2011, P&D sent Sea Pines a letter
contending that Sea Pines had breached the leases because of
a "failure to complete construction of all presently planned
units of Phase I of [the condo project]."  According to P&D,
nearly four years after execution of the lease agreements, Sea
Pines had built only 3 of the 21 condominium-unit buildings. 
In 
the 
letter, 
P&D 
formally 
invoked 
the 
remedy 
of
paragraph 10, asking Sea Pines to "satisfy all remaining
indebtedness owed ... by P&D, LLC, to First National Bank of
Baldwin County."
8
1150025 and 1150052
On September 7, 2011, Sea Pines responded by letter to
P&D's demand, stating that it "has no available cash from
which to acquire the units or assume the debt."  Sea Pines
noted that it had 
"not had any recent sales of units in the
development.  Sea Pines, LLC's agreement with its
lender is that it can construct new units but only
as existing ones are sold.  ...  [T]he market for
units such as these has been extremely depressed and
Sea Pines, LLC certainly hopes that conditions will
improve at some point so that development can
continue and will make economic sense."
Despite Sea Pines' response, it continued to pay rent to P&D
on units 103 and 104 through January 2013.  
Cadence Bank, the successor of Superior Bank, ultimately
declared Sea Pines to be in default on the note secured by the
mortgage on the condo project.  On February 8, 2013, Cadence
Bank conducted a foreclosure sale of the condo project; the
condo project was sold to Wilcox Investment for $685,654.  The
foreclosure deed expressly excluded from the sale the six
units that Sea Pines previously had sold, including units 103
and 104.  
On March 20, 2013, P&D forwarded to Wilcox Investment the
leases between Sea Pines and P&D.  P&D demanded that Wilcox
Investment assume the obligation under the leases of paying
9
1150025 and 1150052
rent to P&D.  On April 9, 2013, Wilcox Investment responded to
the demand:  It denied that it had any obligation under the
leases, and it refused to pay rent to P&D. P&D subsequently
demanded that Wilcox Investment pay off P&D's debt in
accordance with paragraph 10.  Wilcox Investment refused this
demand as well.  
On May 16, 2013, Wilcox Investment conveyed its interest
in the condo project to Foley.  Both Wilcox Investment and
Foley are owned by the same parties.  On December 29, 2014,
Foley filed a "Fourth Amendment to the Declaration of
Condominium" for the condo project.  In this document, Foley
acknowledged that "Cadence Bank ... transferred the special
declarant rights set forth in the Declaration to Wilcox
Investment Group, LLC, by that said Mortgage Foreclosure
Deed."  It further noted that "Wilcox Investment Group, LLC,
transferred the special declarant rights to Foley ...."  The
document stated that the purpose of the amendment to the
declaration was that Foley "desires to exercise its special
declarant rights under Article 5.04 of the Declaration to
contribute another additional phase to the Condominium."
10
1150025 and 1150052
P&D asserts that because neither Wilcox Investment nor
Foley made any rental payments to P&D, it became difficult to
pay the $5,000 per month required to service P&D's mortgage
debt, and so it placed units 103 and 104 for sale.  On October
11, 2013, P&D sold unit 103 for $175,000. On October 22, 2013,
it sold unit 104 for $162,500.  Following the sales, P&D was
left with an unpaid balance on its note of $119,000.
Foley permitted the escrowing of unpaid condominium fees
on units 103 and 104 so that the sales on those units could
close.  After closing, P&D declined to release the escrowed
fees to the Sea Pines Condominium Association, Inc. ("the
Association").  
On February 27, 2014, Fairhope Title Services, LLC
("Fairhope Title"), filed an interpleader action in the
Baldwin Circuit Court against P&D, Wilcox Investment, Foley,
and the Association, in an effort to determine whether P&D
owed the Association $4,340 in condominium fees.  On March 3,
2014, P&D filed its answer to the complaint denying that it
was obligated to pay the condominium fees to the Association;
P&D also filed a cross-claim against Wilcox Investment and
Foley and a third-party complaint against Wilcox Communities. 
11
1150025 and 1150052
Among other things, P&D sought damages from Wilcox for the
alleged breach of the leases on units 103 and 104.
On April 14, 2014, Wilcox Communities filed a motion to
dismiss the P&D action and Wilcox Investment and Foley
answered P&D's cross-claim.  On September 22, 2014, the trial
court 
dismissed 
without 
prejudice 
P&D's 
cross-claim 
and 
third-
party complaint with leave to allow P&D to refile its claims
as a separate action. On September 23, 2014, P&D filed a
separate action asserting the same claims against Wilcox.
The trial court held a combined bench trial of Fairhope
Title's interpleader action and P&D's separate action.  At the
conclusion of P&D's case, Wilcox moved for a judgment as a
matter of law on P&D's claim alleging breach of the leases;
the trial court denied the motion.  
On June 24, 2015, the trial court issued a single
decision for both the interpleader action and P&D's action.
The trial court entered a judgment in favor of the Association
and against P&D for $4,300 in the interpleader action because
it found that P&D "as owner[] [of units 103 and 104], [is]
liable for the established monthly [condominium] dues."  With
regard to P&D's action, the trial court entered a judgment in
12
1150025 and 1150052
favor of P&D and against Wilcox jointly and severally, finding
that Wilcox had breached the leases by not assuming Sea Pines'
rent obligation to P&D. The trial court reasoned that under
the AUCA the leases were included in the special declarant
rights Wilcox Investment had obtained in the foreclosure sale
on the condo project and that, therefore, Wilcox was required
to meet the obligation of paying rent to P&D. Instead of
awarding P&D back rent, however, the trial court concluded
that, because P&D had sold the condo units, "the most
reasonable outcome under the given facts" was to have Wilcox
pay off P&D's remaining debt.  Accordingly, the trial court
awarded P&D damages "of $122,291.00 for the 
remaining mortgage
balances on unit 103 and 104."
P&D filed postjudgment motions in which it requested that
the trial court vacate the judgment against it in the
interpleader action, requested an award of attorney fees and
costs in P&D's action, and requested that the trial court
amend the judgment in its favor in the P&D action to include
$33,120 in back rent and $406,763 in contract damages based on
what it claimed to be the fair market value of units 103 and
104.
13
1150025 and 1150052
Wilcox filed a postjudgment motion in P&D's action in
which it requested that the trial court vacate the judgment
against Wilcox Communities because it was a 
nonexistent 
entity
that had never been served with process.
The Association filed a postjudgment motion in the
interpleader action in which it sought attorney fees and
costs.
In its postjudgment order, the trial court awarded the
Association all costs but only nominal attorney fees. It
awarded P&D costs in P&D's action, but it denied P&D's request
for attorney fees.  The trial court denied Wilcox's request
that it vacate the judgment against Wilcox Communities,  and
5
it denied P&D's request for an amended judgment as to the
amount of its recovery in P&D's action.
On October 8, 2015, the Association and Wilcox filed
notices of appeal in the interpleader action and P&D's action,
respectively. The Association has elected, however, not to
further pursue its appeal of the trial court's denial in part
of its request for attorney fees in the interpleader action.
On October 15, 2015, P&D filed a cross-appeal in P&D's action.
Wilcox does not contest this issue in its appeal.
5
14
1150025 and 1150052
Accordingly, the only parties in this consolidated appeal are
Wilcox and P&D, and the parties' arguments concern only the
trial court's judgment in P&D's action.
II.  Standard of Review
The trial court heard ore tenus evidence during a bench
trial.  Ordinarily, "'"[w]hen a judge in a nonjury case hears
oral testimony, a judgment based on findings of fact based on
that testimony will be presumed correct and will not be
disturbed on appeal except for a plain and palpable error."'"
Kennedy v. Boles Invs., Inc., 53 So. 3d 60, 67-68 (Ala. 2010)
(quoting Smith v. Muchia, 854 So. 2d 85, 92 (Ala. 2003),
quoting in turn Allstate Ins. Co. v. Skelton, 675 So. 2d 377,
379 (Ala. 1996)).  In this case, however, the trial court's
judgment relied on its interpretation of the AUCA, not upon a
disputed question of fact.  "'This court reviews de novo a
trial court's interpretation of a statute, because only a
question of law is presented.'"  Continental Nat'l Indem. Co.
v. Fields, 926 So. 2d 1033, 1034-35 (Ala. 2005) (quoting Scott
Bridge Co. v. Wright, 883 So. 2d 1221, 1223 (Ala. 2003)).
Furthermore, "no presumption of correctness exists as to a
trial court's judgment when the trial court misapplies the law
15
1150025 and 1150052
to the facts."  Brown v. Childress, 898 So. 2d 786, 788 (Ala.
Civ. App. 2004).  The trial court's assessment of damages was
made following the submission of conflicting evidence;
therefore, "'[t]he ore tenus standard of review extends to the
trial court's assessment of damages.'"  Kennedy, 53 So. 3d at
68 (quoting Edwards v. Valentine, 926 So. 2d 315, 325 (Ala.
2005)).
III.  Analysis
A.  Liability Under the AUCA
The trial court concluded that "the Lease Agreements are
related to the Declaration and are obligations imposed by the
AUCA" against Wilcox.  The trial court explained that,
according to § 35-8A-103(24), Ala. Code 1975, using
condominium units as sales models is a "special declarant
right."  Section 35-8A-215 specifically requires that the
model-home special declarant right must be stated in the
declaration, which § 5.02 of the declaration fulfills by
stating that "[a]ll Units ... shall be subject to the
statutory right concerning ... models in Units ... in favor of
the Developer allowed by § 35-8A-215 of the [AUCA]."
Commissioner's Commentary 14, discussing the definition of
16
1150025 and 1150052
"special declarant rights" in § 35-8A-103, states that "the
concept of special declarant rights triggers the 
imposition 
of
obligations 
on 
those 
who 
possess 
the 
rights." 
More
specifically, the trial court emphasized, § 35-8A-304(e),
which addresses "[t]he liabilities and obligations of 
a 
person
who succeeds to special declarant rights," provides 
in 
subpart
(2)a. that "[a] successor to any special declarant right, ...
who is not an affiliate of a declarant, is subject to all
obligations and liabilities imposed by this chapter or the
declaration ... [o]n a declarant which relates to his exercise
or nonexercise of special declarant rights."  The trial court
observed that,
"[u]nder § 35-8A-304(c), an individual that acquires
title to real estate being foreclosed succeeds to
all special declarant rights related to that real
estate held by the declarant. Thus, by virtue of the
foreclosure sale, Wilcox [Investment] succeeded to
all the special declarant rights of Sea Pines
related to the real estate held by Sea Pines."6
Section 35-8A-304(c), Ala. Code 1975, provides, in part:
6
"Unless otherwise provided in a mortgage instrument
or deed of trust or other agreement creating a
security interest, in case of foreclosure of a
security interest, ... of any units owned by a
declarant or real estate in a condominium subject to
development rights, a person acquiring title to all
the real estate being foreclosed or sold succeeds to
all special declarant rights related to that real
17
1150025 and 1150052
Finally, the trial court noted that Commissioner's Commentary
1 to § 35-8A-215 observes that "[t]here are no limitations on
that right [to maintain units as models], so that either units
owned by the declarant or other persons ... may be used for
that purpose." Putting all of this together, the trial court
reasoned: 
"This statutory right to use the units of other
owners as model homes indicates that declarants can
enter into a contract to lease units for the purpose
of exercising that right. Thus, a lease that a
declarant enters into with a unit owner -- to rent
their unit for the purpose of maintaining a model
home -- is an obligation arising under the AUCA and
the Declaration. As such, both P&D and Wilcox are
bound by the obligations of these Lease Agreements."
Wilcox agrees that the right to maintain model homes in
condominium units is a special declarant right reserved in the
declaration and that Wilcox Investment succeeded to this and
other special declarant rights when it purchased the condo
project in the foreclosure sale.  Wilcox argues, however, that
"the mere existence of a special declarant right that the
original developer here chose to exercise through the Leases
does not transform the Leases into obligations 
either 
'imposed
estate held by that declarant, or only to any rights
reserved in the declaration pursuant to Section
35-8A-215 and held by that declarant to maintain
models, sales offices and signs."
18
1150025 and 1150052
by' or 'arising under' the AUCA for [Wilcox] as successor
declarants."  We agree.  
It is true that Sea Pines' right as the declarant to
maintain one or more model condominium units -– as against the
right of the condominium owners generally to the peaceful
enjoyment of their own condominiums and the common areas --
derives from the AUCA and the declaration.  But this right
under the declaration as against condominium owners 
in 
general
is merely a right to use such condominium unit or units in
which Sea Pines, by virtue of its retained ownership or by
lease or other contract, otherwise might at a given time have
a possessory interest.  The right to acquire such a possessory
interest in any given unit is not granted to the declarant by
the AUCA or any associated declaration.  Nothing in the
declaration sets apart units 103 and 104 for some sort of
special use by the declarant as model units.  Because Sea
Pines had sold units 103 and 104, to acquire a possessory
right in those units (in order to be in a position to use
those particular units for the exercise of the special right
under the declaration to operate models), it was necessary for
Sea Pines to acquire that right by way of a lease or similar
19
1150025 and 1150052
contract or conveyance from the owner of those units, which of
course was P&D.  Thus it was that Sea Pines entered into
leases with P&D.   The right of Sea Pines to use P&D's units,
as against the possessory rights of the P&D as their owner,
derived strictly from these leases Sea Pines chose to enter
into with P&D.   And more importantly, Sea Pines' corollary
obligation to pay rent to P&D as consideration for its right
to possess those units was solely a function of those same
leases, not of the AUCA and/or the declaration.  
Sea Pines' transfer of its special declarant rights to
Wilcox Investment did not transfer its obligation to pay rent
to P&D, because that obligation was never imposed on Sea Pines
through the AUCA or the declaration but through the separate
lease agreements.  Viewed from Wilcox's perspective, the
matter may be put as this:  As the purchaser of Sea Pines'
property at foreclosure, Wilcox Investment became the
successor to special declarant rights and obligations
pertaining to the property it purchased.  But Wilcox
Investment did not assume Sea Pines' separate obligation to
pay rent under leases of additional property not owned by Sea
20
1150025 and 1150052
Pines at the time of foreclosure and not purchased by Wilcox
Investment as part of the foreclosure sale.
B.  Liability Under the Leases Apart from the AUCA
Although the trial court did not adopt the argument, P&D
reiterates a contention it made to the trial court that Wilcox
is bound to the leases by the terms of the leases themselves
apart from the provisions of the AUCA.  P&D notes that
paragraph 10 provides that, "[i]n the event Sea Pines, LLC,
its members, successors and assigns elect for any reason not
to complete construction of all presently planned units of
Phase I of Sea Pines at Bon Secour, Sea Pines, LLC, its
members, successors or assigns shall, at the election of P&D,
LLC, either" satisfy P&D's remaining indebtedness for units
103 and 104 or purchase units 103 and 104 from P&D for fair
market value.  (Emphasis added.)  P&D contends that, "[a]s
subsequent developers who acquired special declarant rights,
Wilcox [Investment] and Foley cannot avoid their status as
'successors' and/or 'assigns' of Sea Pines within the meaning
of those terms in the Lease Agreements."  P&D insists that
"the language [in the leases] was intended to bind subsequent
developers who purchased the condominium development. 
21
1150025 and 1150052
The basic problem with this argument is that the intent
of the leases is to trigger a payment obligation by the
lessee, or its successors or assigns as lessee, in the event
Phase I of the project is not completed.  Under the terms of
the leases, if the developer, or its successor and assigns as
developer, fails to complete the condominium project, 
then the
requirement in the lease for a payoff of certain indebtedness
of P&D is triggered.  But the obligation to make that payment
is that of Sea Pines in its capacity as lessee (barring of
course an assignment of the lease itself by Sea Pines to a
successor lessee, which has not happened).  There is no basis
for concluding that Wilcox is an assignee or a successor to
Sea Pines in its capacity as lessee under the leases.  Just
because Wilcox Investment was a "successor declarant" under
the AUCA does not render Wilcox a "successor" to Sea Pines
under the leases.  
The Appellate Court of Illinois in Lake Homeowners Ass'n
v. Bank of Ravenswood, 295 Ill. App. 3d 131, 692 N.E.2d 402,
229 Ill. Dec. 629 (1998), did conclude that a successor
developer that purchased planned-unit-community property in a
foreclosure sale was an "assignee" and a "successor" of the
22
1150025 and 1150052
original developer, but the decision concerned the subsequent
developer's right to develop the property under the
declaration of the condominium and under the Illinois
Condominium Act.  It did not involve whether the subsequent
developer was an assignee under a separate contract.  The Bank
of 
Ravenswood 
court's 
conclusion 
that 
the 
subsequent 
developer
was a "successor" to the original developer was based on the
principle that, "[i]n a foreclosure proceeding, the purchaser
of the collateral at the public sale takes title to the
property subject to all prior liens and encumbrances."  295
Ill. App. 3d at 137, 692 N.E.2d at 406, 299 Ill. Dec. at 633. 
As we already have noted, however, units 103 and 104 were
expressly excluded from Wilcox Investment's purchase of the
condo project in the foreclosure sale.  Consequently, the
property Wilcox Investment purchased was not encumbered 
by 
the
leases.7
Similarly, in Meritage Homes of Arizona, Inc. v. Weston
7
Ranch Property Owners Ass'n, Inc., (No. 1 CA-CV 11-0373)
(Ariz. Ct. App. 2012) (not reported in P.3d), the question was
whether a subsequent developer had been "assigned" the
original developer's declarant rights, including the right to
appoint board members to the condominium community's board of
directors, when it purchased 51 of the 55 lots in the
community in a trustee's sale that followed the bankruptcy of
the original developer.  Neither Bank of Ravenswood nor 
Meritage Homes concerned whether the subsequent developers
23
1150025 and 1150052
P&D also cites Alabama cases in which this Court
determined that the purchaser of a lessor's interest in real
property during the unexpired term of a lease was substituted
as the lessor with "all the rights of the original lessor."
Plastone Plastic Co. v. Whitman-Webb Realty Co., 278 Ala. 95,
97, 176 So. 2d 27, 28 (1965).  Plastone Plastic is no help to
P&D, though, because in that case the Court noted that it was
undisputed that the purchaser was a successor of the original
lessor.  278 Ala. at 97-98, 176 So. 2d at 29. Moreover, the
purchaser was aware of the lease and assumed duties as the
lessor following the purchase of the real estate. 
P&D also cites Texas Co. v. Birmingham Southern College,
239 Ala. 158, 194 So. 192 (1940). In Texas Company, the
question was whether a mortgagee was bound by the terms of a
lease when the mortgagee foreclosed on the property of the
lessor. The mortgagee argued that because her mortgage
preceded the lease, she "did not by virtue of the foreclosure
of the mortgage and the purchase of the property at the sale,
in and of these facts alone, create the relationship of
acquired 
contractual 
obligations 
of 
their 
predecessor
developers.  
24
1150025 and 1150052
landlord and tenant between the [lessee] and 
the 
[mortgagee]."
239 Ala. at 161, 194 So. at 194.  The Court agreed with the
mortgagee's general point of law, but it stated that the
particular facts of the case removed it from the application
of that general rule.  Specifically, the Court noted that,
although a lease provision that stated that the agreement "was
not only binding upon the parties but upon their respective
successors or assigns," "without more, was not binding upon
the mortgagee," the lease also contained a clause that stated:
"'I, as mortgagee, give my approval to this lease, without
waiving any rights held under first mortgage, but subject to
such mortgage,'" which was followed by the signature of the
mortgagee.  Id.  The Court determined that the latter clause
with the mortgagee's signature constituted consent that she
would become "the successor" to the lessor if she foreclosed
on the mortgage.  Id.  We have no such similar express
acceptance by Wilcox Investment of responsibility for the
leases when it purchased the condo project at the foreclosure
sale.
The import of P&D's argument that Wilcox is a "successor"
or "assign" under the leases is that general rules of
25
1150025 and 1150052
corporate and contract law do not apply in this situation. 
But § 35-8A-108, Ala. Code 1975, expressly provides:
"The principles 
of 
law 
and 
equity, 
including 
the
law of corporations, the law of real property and
the law relative to capacity to contract, principal
and 
agent, 
eminent 
domain, 
estoppel, 
fraud,
misrepresentation, 
duress, 
coercion, 
mistake,
receivership, substantial performance, or other
validating or invalidating cause supplement the
provisions of this chapter, except to the extent
inconsistent with this chapter."
(Emphasis added.)  According to those principles of law,
Wilcox clearly is not an "assignee" or "successor" of Sea
Pines under the leases.  Therefore, Wilcox is not liable on
the obligation to pay rent under the leases on the basis of
paragraph 10.
IV.  Conclusion
Based on the foregoing, we conclude that Wilcox was not
bound by the leases, and it therefore cannot be held liable
for a refusal to pay rent under the leases.  The trial court
erred in concluding otherwise.  This result pretermits any
need to discuss Wilcox's argument that the trial court awarded
P&D a remedy to which it was not entitled under the leases. 
Our decision also moots the issues presented by P&D's cross-
appeal as to whether the trial court erred in failing to award
26
1150025 and 1150052
P&D:  (1) past-due rent; (2) the actual value of the two units
lost as a consequence of the alleged breach of the leases; and
(3) attorney fees.  In sum, the trial court's judgment against
Wilcox is reversed and P&D's cross-appeal is dismissed.
1150025 –- REVERSED AND REMANDED.
1150052 –- APPEAL DISMISSED.
Stuart, Parker, Murdock, Shaw, Main, and Wise, JJ.,
concur.
Bryan, J., dissents.
27