Title: Pavilion Development, L.L.C. v. JBJ Partnership et al.
Citation: N/A
Docket Number: 1141416
State: Alabama
Issuer: Alabama Supreme Court
Date: May 13, 2016

Rel: 05/13/2016
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
OCTOBER TERM, 2015-2016
____________________
1141259
____________________
E.B. Investments, L.L.C.
v.
Pavilion Development, L.L.C., et al.
____________________
1141416
____________________
Pavilion Development, L.L.C.
v.
JBJ Partnership et al.
Appeals from Madison Circuit Court
(CV-97-563.80)
1141259, 1141416
MAIN, Justice.
E.B. 
Investments, 
L.L.C. 
("EB Investments"), appeals 
from
an order of the Madison Circuit Court holding that Pavilion
Development, L.L.C. ("Pavilion"), was entitled to redeem
certain property in Madison County in which EB Investments and
other parties held legal interests (appeal no. 1141259). 
Pavilion filed a separate appeal naming as appellees JBJ
Partnership ("JBJ"), Pace Properties ("Pace"), James P. Pace,
individually and as personal representative of the estate of
James E. Pace, and William Byron Pace and challenging certain
aspects of the same order, namely, the amount it must pay to
redeem the property (appeal no. 1141416).  The appeals were
consolidated for the purpose of issuing one opinion.  As to EB
Investments' appeal, we affirm in part and dismiss the appeal 
in part.  As to Pavilion's appeal, we affirm in part, reverse
in part, and remand.
I.  Facts and Procedural History
This nearly two-decade-old case is a veteran of numerous
appellate campaigns.  Pavilion's attempted redemption of the
property at issue has given rise to five opinions from this
Court.  See Ex parte Atlantis Dev. Co., 897 So. 2d 1022 (Ala.
2
1141259, 1141416
2004); EB Invs., L.L.C. v. Atlantis Dev., Inc., 930 So. 2d 502
(Ala. 2005); Pavilion Dev., L.L.C. v. JBJ P'ship, 979 So. 2d
24 (Ala. 2007) ("Pavilion I"); Pavilion Dev., L.L.C. v. JBJ
P'ship, 77 So. 3d 133 (Ala. 2011) ("Pavilion II"); and
Pavilion Dev., L.L.C. v. JBJ P'ship, 142 So. 3d 535 (Ala.
2013) ("Pavilion III").  Although the facts of this redemption
case are "immensely complicated," Pavilion III, 142 So. 3d at
535, they have been recited by this Court on several
occasions:
"This action was initiated on March 21, 1997,
when Pavilion, then operating as John Lary, L.L.C.,
initiated an action to redeem 19 acres of land
purchased by JBJ Partnership ('JBJ')at a foreclosure
sale on March 22, 1996. ... 
"In August 1991, James E. Pace, James P. Pace,
and William B. Pace ('the Pace family'), doing
business 
as 
Pace 
Properties 
('Pace'), 
sold
approximately 22 acres of unimproved property in
Madison 
County 
to 
Gallop 
Enterprises, 
Inc.
('Gallop'), a development company operated by
Richard Tracey.  The transaction was financed by
Pace and in exchange for the land Gallop gave a
promissory note secured by a mortgage on the
property to Pace in the principal sum of $1,735,000.
Gallop then obtained additional financing from Ben
H. Walker, Inc. ('Walker'), to develop a subdivision
on the property, and in return Gallop gave Walker a
second mortgage on the property with a principal
value of $149,999.  Gallop thereafter began
developing the planned subdivision; however, after
completing the first phase of the project and paying
Pace approximately $295,990 obtained from sales of
3
1141259, 1141416
lots in the subdivision, Gallop had exhausted the
funds advanced by Walker and could not proceed with
the second phase of the subdivision project.  Under
the threat of foreclosure, Gallop filed a petition
for bankruptcy pursuant to Chapter 11 of the
Bankruptcy Code.
"In April 1995, under the supervision of the
bankruptcy court, the parties reached a settlement
agreement wherein Gallop stipulated that it owed
$1,439,010 to Pace and $149,999 to Walker.  Pace
also agreed to loan Gallop up to an additional
$200,000 so that Gallop could complete development
of the property and could then pay its debts to
Walker and Pace with proceeds obtained from selling
developed lots in the subdivision.  In conjunction
with the settlement agreement, Gallop executed 3 new
mortgages on the 19 acres left in the development
tract, which mortgages had the following priority:
1) a mortgage in favor of Pace securing a $200,000
loan ('the development mortgage'); 2) a mortgage in
favor of Walker securing the $149,999 note; and 3)
a mortgage in favor of Pace securing the $1,439,010
loan.  The settlement agreement and the new
mortgages were all then recorded in the Madison
County Probate Judge's Office.
"By December 1995, Gallop was again in default
on its obligations, and Pace instituted foreclosure
proceedings.  On March 22, 1996, the property was
sold to JBJ -- a new partnership made up of the Pace
family -- at a foreclosure auction for $100,000. 
The Pace family thereafter paid off the Walker note
and continued developing the property on its own,
conveying parcels and interests in the property as
follows:
"1) On June 6, 1996, JBJ conveyed a
permanent drainage easement over a portion
of the property to the City of Huntsville.
4
1141259, 1141416
"2) On June 10, 1996, JBJ conveyed one lot
to Asghar D. Pourhassani.
"3) On September 20, 1996, JBJ conveyed two
lots to Atlantis Development Company, Inc.
('Atlantis'). 
 
Atlantis 
thereafter 
executed
multiple mortgages on that property in
favor of Jacobs Bank[ ] and JBJ.
1
"4) On January 16, 1997, JBJ conveyed
another lot to Atlantis, which lot Atlantis
resold to Fritz and Louise Nelson on that
same day.
"On March 1, 1997, Gallop, acting through
Tracey, sent a letter to JBJ stating that Gallop
intended to exercise its statutory right of
redemption, see § 6–5–247 et seq., Ala. Code 1975,
and to redeem the 19 acres it had lost in
foreclosure.  Gallop accordingly requested that JBJ
provide it with an itemized statement of the lawful
charges it would need to pay to complete the
redemption and simultaneously requested that JBJ
loan Gallop those funds.  On March 9, 1997, Gallop
sent similar notices requesting statements of lawful
charges to Pourhassani and Atlantis.  On March 13,
1997, after JBJ had advised Tracey that it did not
recognize his authority to exercise Gallop's right
of redemption, Tracey transferred Gallop's right of
redemption to Pavilion, a company operated by his
former brother-in-law John Lary and then still known
as John Lary, L.L.C., in return for $1,000.
"On March 21, 1997, Pavilion initiated this
litigation by filing a redemption action in the
Madison Circuit Court.[ ]  Both before and after
2
EB Investments is the successor-in-interest to Jacobs
1
Bank.
Specifically, in addition to numerous fictitiously named
2
defendants, 
Pavilion's 
original 
redemption 
complaint 
named 
JBJ
5
1141259, 1141416
filing suit, Pavilion continued to make requests for
statements of charges from assorted parties with
interests in the property, and some produced the
requested statements.  Over the following months and
years, a host of counterclaims, cross-claims, and
separate 
lawsuits 
encompassing 
all 
manner 
of
contract and tort claims were filed by various
parties who had interests in the property or who
were otherwise drawn into the dispute.  This Court
has already considered some of the issues related to
those claims beginning with Ex parte Atlantis
Development[Co.], [897 So. 2d 1022 (Ala. 2004),] in
which we denied a petition for a writ of mandamus
filed by Atlantis in a separate action initiated in
February 2003 by JBJ and Pace claiming that Atlantis
had defaulted on promissory notes secured by
mortgages on the property it had purchased from JBJ. 
In EB Investments, [L.L.C. v. Atlantis Development,
Inc., 930 So. 2d 502 (Ala. 2005),] we reversed in
part a judgment issued in yet another separate
action, this one filed in January 2004 by EB
Investments (which now owned the mortgages Atlantis
had originally executed in favor of Jacobs Bank)
seeking to eject Atlantis from the lots Atlantis
Partnership, James Edgar Pace, James Patrick Pace, William
Byron Pace, Asghar D. Pourhassani, Atlantis Development 
Company, Inc., and Fritz and Louise Nelson as defendants and
included the following counts: a count seeking redemption and
a declaratory judgment (count I) and a count seeking to quiet
title to the property (count II).  Pavilion later amended its
complaint to include a count challenging the  "lawful charges"
claimed by Atlantis and the Nelsons.  Subsequent amendments
added as defendants the City of Huntsville, the holder of a
drainage easement over a portion of the subject property, and
Jacobs Bank, Atlantis's mortgagee. EB Investments, L.L.C., is
the successor in interest to Jacobs Bank.  Further, by means
of separate requests made pursuant to Rule 24, Ala. R. Civ.
P., both E. Ray McKee, Jr., the closing attorney on the
Atlantis transaction, and the Madison County tax collector, a
lienholder with regard to property taxes for the 2005 tax
year, sought to intervene in the redemption litigation.
6
1141259, 1141416
purchased from JBJ in September 1996.  Finally, in
August 2007, we decided an appeal in the instant
action in which we reversed a summary judgment
entered by the trial court in favor of JBJ and
against Pavilion, holding that the trial court had
erred when it concluded that Tracey lacked the
authority to transfer Gallop's right of redemption
to Pavilion and holding that Pavilion did in fact
hold the right to redeem the 19 acres at issue.  See
Pavilion [I], 979 So. 2d at 37. ..."
Pavilion II, 77 So. 3d at 134-35 (footnotes omitted).
In Pavilion III we summarized the proceedings following
our remand in Pavilion I: 
"On 
remand 
following 
our 
decision 
in 
Pavilion 
I,
the trial court conducted a four-day bench trial
aimed solely at deciding the merits of Pavilion's
redemption claim.  Upon the conclusion of the trial
and 
subsequent 
to 
the 
parties' 
posttrial
submissions, the trial court entered an amended
final judgment that included the following summary
of its findings:
"'"In summary, the court finds that
[Pavilion] is entitled to redeem the
property 
described 
in 
its 
original
complaint.  In order to perfect and
complete its redemption, Pavilion must
deposit into the office of the Clerk of the
Circuit Court of Madison County, Alabama,
the sum of $3,770,348.90,
 plus all
[2]
accruing interest and delinquent fees from
March 10, 2010, to the date of payment,
within 30 days from the date of this
judgment. [Pavilion] shall be entitled to
a credit against this sum for all monies it
placed on deposit with the Clerk of Circuit
Court 
of 
Madison 
County 
following
7
1141259, 1141416
[Pavilion's] 
filing 
of 
this 
suit, 
including
accrued interest.  Upon payment into court
of all sums required, each of the current
title holders of the property to be
redeemed shall deliver to the Clerk of the
Circuit Court a deed conveying all of the
transferors' right, title and interest in
each 
lot 
or 
parcel 
of 
property 
to
[Pavilion] and shall be paid by the Clerk
all sums due in accordance with this
judgment. 
 
Specifically, 
upon 
redemption 
as
set forth in this order, the Clerk is
directed to distribute the funds as
follows:
"'"a.   $2,804,472 jointly to
[the Pace family];
"'"b.   $930,001 to [Atlantis];
"'"c. 
$35,875.99, 
plus 
all
accruing interest and delinquent
fees from March 10, 2010, to the
date of payment to the Tax
Collector 
of 
Madison 
County,
Alabama.
"'"If [Pavilion] fails to pay all sums
required by this order within 30 days from
this judgment, [Pavilion] will be held to
have forever waived its right to redeem the
subject property.  Should any posttrial
motion or notice of appeal be filed in this
case, all times stipulated herein shall be
stayed 
pending 
resolution 
of 
such 
posttrial
motions or appeal subject, however, to the
continuation of interest on all sums due at
the same rates as set forth herein, plus
all accruing interest and delinquent fees
from March 10, 2010 to the date of payment.
All 
other 
claims 
for 
relief 
not
8
1141259, 1141416
specifically addressed herein are denied. 
Costs are taxed as paid."'
"77 So. 3d at 135-36.  Subsequent to the entry of
the above-quoted order, the trial court denied all
remaining postjudgment motions and certified its
judgment as final pursuant to Rule 54(b), Ala. R.
Civ. P.; both EB Investments, L.L.C., and Pavilion
appealed.  See Pavilion II, 77 So. 3d at 136.
__________________
"  The amounts provided later in the trial
2
court's order actually total $3,770,348.99."
Pavilion III, 142 So. 3d at 537-38.
In Pavilion II, we held that the order quoted above,
despite its Rule 54(b), Ala. R. Civ. P., certification, was
not a final judgment because it failed to fully resolve
Pavilion's redemption claim.
"[A] judgment on Pavilion's redemption claim should
fully resolve that claim and resolve all outstanding
issues concerning lawful charges and revived liens
so that Pavilion can make an informed decision as to
whether it wishes to complete redemption of the
property or forever waive that right.  The trial
court's judgment fails to do so in at least three
respects.  First, the trial court's judgment fails
to address the City of Huntsville's interest in the
property.  Huntsville obtained from JBJ a permanent
drainage easement over a portion of the property on
June 6, 1996, and is accordingly entitled to
compensation for that interest if Pavilion redeems
the property.  Pavilion may not elect to forgo
redemption of Huntsville's interest while redeeming
the rest of the property because '[t]he law does not
allow piecemeal redemption, absent an agreement
providing for it,' Costa & Head (Birmingham One),
9
1141259, 1141416
Ltd. v. National Bank of Commerce of Birmingham, 569
So. 2d 360, 363 (Ala. 1990), and there is no
evidence indicating that the mortgage foreclosed
upon contained a provision allowing for piecemeal
redemption.  It is unclear if Huntsville constructed
any improvements to the property in accordance with
its interest for which it would be due compensation,
and, if it did not, the trial court may well find,
as it did with the property held by [Asghar D.]
Pourhassani (who also submitted no evidence of
improvements to the lot he owned), that the sum set
out as being due JBJ necessarily included the amount
required to redeem Huntsville's interest also.  In
that case, the specific amount due Huntsville from
the sum awarded JBJ could be determined after
Pavilion elects to complete redemption of the
property, if it in fact does so. However, in light
of the possibility that Huntsville could be entitled
to some compensation directly from Pavilion for
lawful charges, its interest should be addressed by
the trial court before we consider an appeal of a
judgment deciding the redemption claim.
"Similarly, the trial court's order fails to
award any compensation to [Fritz and Louise Nelson],
who, on January 16, 1997, purchased a lot from
Atlantis that Atlantis had earlier purchased from
JBJ.  The trial court declined to award any
compensation to the Nelsons because of a settlement
agreement entered into by the Nelsons and Pavilion
whereby Pavilion agreed not to redeem the Nelsons'
lot and the Nelsons agreed not to pursue any claims
against Pavilion.  However, as noted supra, '[t]he
law does not allow piecemeal redemption.'  Costa &
Head, 569 So. 2d at 363.  As this Court further
explained in Shealy v. Golden, 897 So. 2d 268,
272–73 (Ala. 2004):
"'Once one or more tracts of land are
sold at a foreclosure sale, the manner in
which 
those 
tracts 
are 
divided 
up
determines the units in which those tracts
10
1141259, 1141416
"may and must" be redeemed.  Redemption
must be made in such units; therefore,
piecemeal redemption of a portion of that
unit is prohibited.'
"(Footnote omitted.)  At the foreclosure sale on
March 22, 1996, the property Pavilion now seeks to
redeem was sold to JBJ as a single 19–acre unit for
$100,000.  Thus, notwithstanding the fact that JBJ
later began parceling off the property, Pavilion is
required to redeem the entire 19–acre tract if it
wishes to redeem the property at all.  The trial
court indicated in its judgment that the Nelsons
properly and timely provided Pavilion with a
statement of charges.  Following the dismissal of
these appeals, the trial court should accordingly
calculate the lawful charges Pavilion would owe the
Nelsons in order to complete redemption of their
lot.
"Finally, the trial court's order stated that
the development mortgage Gallop executed in favor of
Pace as part of the April 1995 settlement agreement
would be revived upon redemption and thereafter
remain a superior lien upon the property.  See §
6–5–248(d), Ala. Code 1975 (stating that, when 'any
[party] redeem[s], all recorded judgments, recorded
mortgages, and recorded liens in existence at the
time of the sale, are revived against the real
estate 
redeemed 
and 
against 
the 
redeeming
party....').  However, the trial court did not
determine the balance of the loan secured by the
development mortgage.  The April 1995 settlement
agreement originally capped the balance at $200,000;
however, JBJ and the Pace family argue that the
agreement was later modified, and they claim that
the balance due is now $282,778.  Pavilion asserts
that the balance is only $154,386.  Pavilion argues
that the trial court's failure to decide the balance
due on the loan secured by the development mortgage
would likely result in a subsequent foreclosure
action involving issues intertwined with the issues
11
1141259, 1141416
in this case and that the trial court's Rule 54(b)
certification was accordingly improper.  We agree
that the trial court should rule on this issue
before we consider an appeal of the other elements
of the trial court's judgment.  Doing so will not
only lessen the risk of future litigation involving
these issues, but also allow Pavilion to make its
decision whether to redeem the property with full
knowledge of the liabilities it would be assuming by
doing so."
Pavilion II, 77 So. 3d at 137-38.  Because we concluded that
the judgment was not final, we dismissed the appeals.  77 So.
3d at 139.
Thereafter, the trial court amended the judgment to
address the three unresolved issues we noted in Pavilion II:3
"'1.  The Supreme Court has directed the Court to
ascertain what amount would be due to the City of
Huntsville to redeem its interest in the subject
property. ... Pavilion and the City of Huntsville
stipulate that nothing would be owing to the City of
Huntsville upon any redemption of the property, as
the City paid nothing for its easement deed, has
made no improvements, has paid no fees, and is not
otherwise entitled to any lawful charges.
"'2.  This Court was further directed to calculate
the lawful charges that Pavilion would owe to Fritz
and Louise Nelson in order to complete redemption of
their lot.  Pavilion and the Nelsons stipulate that
the Nelsons would be owed the sale price of
The trial in this matter was presided over by Judge
3
Anthony Clark Hall, who issued the order addressed in Pavilion
II.  Following our decision in Pavilion II, the case was
reassigned to Judge Robert S. Vance, Jr., who issued the order
addressed in Pavilion III.
12
1141259, 1141416
$47,500.00, plus $5,700.00 statutory interest,
totaling $53,200.00, to redeem their interest.  The
Court does not address any further agreements
between these parties.
"'3.  The Supreme Court's final directive was to
determine the balance of the loan secured by the
'Pace Development Mortgage.'  Pavilion and the Pace
defendants are in dispute on this amount.  The Court
agrees with the Pace defendants that under ...
Section 8.01 of the bankruptcy settlement agreement
previously introduced into evidence Pace had the
right to apply post-default expenditures on the
project 
to 
the 
balance 
available 
under 
the
development note, up to a cap of $200,000.00.  The
undisputed evidence is that such expenses incurred
by Pace exceed $200,000.00.  Accordingly, and under
the terms of the instruments between the parties,
the lien created by the Pace development note and
mortgage, which would be revived upon any redemption
and thereafter remain as a superior lien on the
subject property, totals $200,000.00.'"
Pavilion III, 142 So. 3d at 541.
Although the trial court's amended order addressed each
of the issues specifically identified as unresolved in
Pavilion II, in Pavilion III we identified additional
outstanding issues related to Pavilion's redemption claim and
again held that the trial court's judgment was not final.  We
stated:
"Although the trial court, in attempting to rectify
the nonfinal status of its original order, dutifully
addressed 
the 
three 
deficiencies 
specifically
identified by the Court in Pavilion II, it did not
address the interests of all defendants to the
13
1141259, 1141416
redemption action with regard to all parcels
affected thereby.
"Instead, as both Pavilion and EB Investments
agree, the trial court's amended judgment fails,
among other things, to address all the interests
attached to lots 2 and 12, which Atlantis purchased
post-foreclosure.  Missing from the trial court's
amended judgment is a determination of the lawful
charges, if any, due EB Investments and/or JBJ with
regard to their respective mortgages on those
properties.  Both EB Investments, as successor in
interest to Jacobs Bank, and JBJ hold post-
foreclosure mortgages on two lots encompassed in the
subject property and are defendants in this case. 
See § 6-5-253(a)(5), Ala. Code 1975 (providing that
the 'lawful charges'  the redeeming party must pay
include mortgages on the properties subject to
redemption to the extent of the purchase price). 
Although 
the 
trial 
court's 
original 
judgment
included an award to Atlantis, there is no judgment
with respect to the claims of EB Investments and
JBJ, who are also defendants in this action.  This
failure, as Pavilion notes, would require Pavilion
to make a redemption decision without full knowledge
of the liabilities it would be assuming by doing so,
i.e., it must elect to redeem without knowing
whether some additional party with an interest in
the property might be held entitled to subsequent
compensation from Pavilion for lawful charges
accruing to that party.  77 So. 3d at 138."
142 So. 3d at 542.  Thus, we again dismissed the appeal as
being from a nonfinal judgment.  
Following our decision in Pavilion III, the trial court
ordered the parties to address in writing the issues
identified by this Court in Pavilion III, as well as "any
14
1141259, 1141416
issues not addressed by previous orders of the trial court
concerning lawful charges and revived liens that need to be
resolved so that Pavilion can make an informed decision as to
whether it wishes to complete redemption of the property."  On
August 17, 2015, the trial court entered a new order
attempting to address fully all the issues necessary to
Pavilion's redemption.  The trial court adopted the findings
of the previous orders except as specifically modified in its
new order, which stated, in pertinent part:4
"Atlantis Mortgages
"Pace (JBJ) conveyed a portion of Lot 2, Block
2, Pavilion, and Lot 12, Block 1, Pavilion Phase II,
to Atlantis on September 20, 1996, post-foreclosure. 
On that same day, Atlantis mortgaged these lots to
Jacobs Bank.  And also on the same day, Atlantis
also executed a mortgage to JBJ for Lot 12.  On
December 26, 1996, Atlantis executed an additional
mortgage to Jacobs Bank for Lot 12.
"All the Jacob Bank mortgages executed by
Atlantis are now owned by E.B. Investments.
"In the event Pavilion elects to redeem, it must
pay to E.B. Investments, as a payoff on the Atlantis
mortgages owned by E.B. Investments, the sum of
$558,673.36 plus interest accruing in the sum of
$56.42 per diem after June 15, 2015.
Following our decision in Pavilion III, the case was
4
reassigned to Judge Randall Cole.  Judge Cole's order
referenced the previous two orders by date and the then-
presiding trial judge.  
15
1141259, 1141416
"The court finds that ad valorem taxes have been
assessed and unpaid on Lot 2, Block 2, Pavilion
Phase I, in the amount of $51,271.76, and on Lot 12,
Block 1, Pavilion Phase II in the amount of
$19,593.69, and that these sums are due to be paid
by Pavilion upon redemption.
"Judge Hall found that Atlantis was entitled to
compensation for the value of permanent improvements
made on Lots 2 and 12 (more specifically described
above), and this court finds that with accumulated
interest since the date of Judge Hall's order to
June 15, 2015, such compensation amounts are as
follows: $541,948 as to Lot 2, and $605,717 as to
Lot 12.  These sums are due to be paid by Pavilion
upon redemption.
"....
"Pourhassani Lot
"On June 10, 1996, JBJ conveyed Lot 15, Block 1,
Pavilion Phase II to Asghar Pourhassani.  The
consideration paid for the lot was $34,500. 
Pourhassani made no improvements to the lot.  In the
event Pavilion elects to redeem, it must pay
Pourhassani the purchase price paid plus interest at
the rate of 12 percent from the date this suit was
filed.  The redemption sum due is $147,750 as of
June 15, 2015.
"Judge Hall's order of May 27, 2010, determined
that Pourhassani never filed an answer to the
complaint and a default was entered against him.  He
has made no claim for reimbursement of taxes paid,
and the court finds that Pavilion is not obligated
to reimburse Pourhassani for any taxes paid by him
on the lot.
"Nelson Lot
16
1141259, 1141416
"Judge Vance found in his order of December 21,
2011, that Pavilion and the Nelsons stipulated that
the Nelsons would be owed the sale price of $47,500,
plus $5,700 statutory interest, totaling $53,200. 
Judge Vance's order failed to include any sum due on
redemption for the reasonable value of permanent
improvements on the Nelson lot.  The court finds
that there were permanent improvements on the lot in
the sum of $141,600, and that with accrued interest
Pavilion is due upon redemption to pay the Nelsons
the sum of $504,823 for such improvements plus
$53,200 owed for the sale price plus interest.  Ad
valorem taxes have been paid on this lot but there
is no claim for reimbursement, and the court finds
that Pavilion is not obligated to reimburse the
Nelsons for any taxes paid on this lot.
"Walker Mortgage
"Judge Hall's order of May 27, 2010, found that
Pace/JBJ has paid the debt due Ben H. Walker, Inc.,
which was secured by a superior mortgage lien on the
property in question, and that the amount paid to
satisfy such mortgage was due to be paid by Pavilion
upon redemption as a lawful charge.  The court
adopts this finding by Judge Hall.
"Pace Development
"Judge Vance found the following in his order of
December 21, 2011:
"'The Supreme Court's final directive
was to determine the balance of the loan
secured 
by 
the 
"Pace 
Development 
Mortgage." 
Pavilion and the Pace defendants are in
dispute on this amount.  The Court agrees
with the Pace defendants that under 
Section 8.01 of the bankruptcy settlement
agreement 
previously 
introduced 
into
evidence, Pace had the right to apply post-
default expenditures on the project to the
17
1141259, 1141416
balance available under the note, up to a
cap of $200,000.00.  The undisputed
evidence is that such expenses incurred by
Pace exceed $200,000.00.  Accordingly, and
under the terms of the instruments between
the parties, the lien is created by the
Pace development note and mortgage, which
would be revived upon any redemption and
thereafter remain as a superior lien on the
subject property, totals $200,000.00.'
"The court adopts the above finding in Judge
Vance's order of December 21, 2011, but modifies the
finding to add that once revived the total lien
would include interest as provided in the note.
"JBJ (Pace) Second Mortgage Foreclosed Upon
"Judge Hall's order of May 27, 2010, found that
Pavilion was due to pay Pace an unpaid principal
balance on the foreclosed mortgage of $1,339,010,
plus accrued interest of $1,141,056.  The court
adopts this finding, and further finds that
additional interest has accrued through June 15,
2015, of $404,782, for a total of $2,884,848 being
due from Pavilion to satisfy the principal balance
and interest.
"Judge Hall also found that Pavilion was due to
pay JBJ lawful charges, including ad valorem taxes
and insurance premiums paid by Pace/JBJ on all the
Pavilion land not transferred by JBJ after the date
of the foreclosure purchase in March 1996, including
the amount expended by Pace/JBJ to satisfy the
Walker mortgage, these lawful charges totaling
$212,406.  The court adopts this finding, and
further finds that interest has accrued on such
charges through June 15, 2015, of $465,067, making
the total sum of $677,474 due the Pace parties for
these lawful charges.
"City of Huntsville
18
1141259, 1141416
"Judge Vance found that Pavilion and the City of
Huntsville stipulated that nothing would be owing to
the City of Huntsville upon redemption of the
subject property, as the City paid nothing for its
easement deed, has made no improvements, has paid no
fees, and is not otherwise entitled to any lawful
charges.  The court adopts this finding.
"Other Taxes Assessed and/or Insurance
"Any claim 
for reimbursement 
of 
ad 
valorem 
taxes
or insurance not addressed herein is denied due to
insufficient evidence.
"Conclusions
"It is adjudged that if Pavilion elects to
redeem, it shall deposit with the clerk of court the
sum 
of 
$6,106,934.81 
(less 
funds 
previously
deposited and any interest that has accumulated
thereon) plus all accruing interest at the rate of
6% per annum after June 15, 2015.
"This sum is based on the following redemption
amounts due to be paid:
a.
Pace Second Mortgage: $2,884,848.
b.
Pace Lawful Charges: $677,474 (including
satisfaction of the Walker mortgage plus
interest).
c.
Atlantis Lawful Charges for improvement of
Lot 2 plus interest: $541,948.
d.
Atlantis 
Lawful 
Charges 
for 
improvements 
to
Lot 12 plus interest: $605,717.
e.
Madison County Tax Collector for unpaid
assessments 
on 
Lot 
2 
and 
Lot 
12:
$70,865.45.
f.
E.B. Investments Mortgages: $558,673.36.
g.
JBJ mortgages on Lot 12: $61,636.
h.
Pourhassani 
Lot 
(purchase 
price 
and
interest): $147,750.
19
1141259, 1141416
i.
Nelson Lot (purchase price and interest):
$53,200.
j.
Nelson Lawful Charge for improvements plus
interest:  $504,823.
"....
"Upon deposit of the designated funds with the
clerk of court, the parties hereto who hold an
interest in the subject property shall within 14
days therefrom execute and deliver to the clerk a
deed conveying their respective interest therein to
Pavilion, and, where appropriate, a satisfaction of
mortgage for filing in the Madison County Office of
Probate. ...
"If plaintiff fails to pay all sums required by
this order within 30 days from the entry hereof,
plaintiff will be held to have forever waived its
right to redeem the subject property.  Should any
post-trial motion or notice of appeal be filed in
this case, all times stated herein shall be stayed
pending resolution of such post-trial motions or
appeal subject, however, to the continuation of
interest accruing in accordance with law.  All
claims not addressed in this order and the previous
orders of the court in the matter are denied, and
the court finds that no further payments shall be
due by Pavilion upon redemption."
The trial court certified the order as final pursuant to
Rule 54(b), Ala. R. Civ. P.  Pavilion's Rule 59, Ala. R. Civ.
P., postjudgment motion was denied on September 28, 2015. 
These appeals followed.
II.  Standard of Review
20
1141259, 1141416
The parties do no dispute that the applicable standard of
review in these appeals is the ore tenus standard.
"Because the trial court heard ore tenus
evidence during the bench trial, the ore tenus
standard of review applies.  Our ore tenus standard
of review is well settled.  '"When 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."'  Smith v.
Muchia, 854 So. 2d 85, 92 (Ala. 2003) (quoting
Allstate Ins. Co. v. Skelton, 675 So. 2d 377, 379
(Ala. 1996)).
"'"The ore tenus rule is grounded upon the
principle that when the trial court hears
oral testimony it has an opportunity to
evaluate the demeanor and credibility of
witnesses."  Hall v. Mazzone, 486 So. 2d
408, 410 (Ala. 1986).  The rule applies to
"disputed issues of fact," whether the
dispute is based entirely upon oral
testimony or upon a combination of oral 
testimony and documentary evidence.  Born
v. Clark, 662 So. 2d 669, 672 (Ala. 1995). 
The 
ore 
tenus 
standard 
of 
review,
succinctly stated, is as follows:
"'"[W]here the evidence has been
[presented] 
ore 
tenus, 
a
presumption 
of 
correctness
attends 
the 
trial 
court's
conclusion on issues of fact, and
this Court will not disturb the
trial court's conclusion unless
it 
is 
clearly 
erroneous 
and
against the great weight of the
evidence, but will affirm the
judgment if, under any reasonable
21
1141259, 1141416
aspect, 
it 
is 
supported 
by
credible evidence."'
"Reed v. Board of Trs. for Alabama State Univ., 778
So. 2d 791, 795 (Ala. 2000) (quoting Raidt v. Crane,
342 So. 2d 358, 360 (Ala. 1977)).  However, 'that
presumption [of correctness] has no application when
the trial court is shown to have improperly applied
the law to the facts.'  Ex parte Board of Zoning
Adjustment of Mobile, 636 So. 2d 415, 417 (Ala.
1994)."
Kennedy v. Boles Invs., Inc., 53 So. 3d 60, 67-68 (Ala. 2010). 
Furthermore, where there are no disputed facts and where the
judgment is based entirely upon documentary evidence, our
review is de novo.  Weeks v. Wolf Creek Indus., Inc., 941 So.
2d 263, 268-69 (Ala. 2006).
III.  Analysis
A.  Finality of judgment
In Pavilion II, we approved the trial court's decision to
resolve Pavilion's redemption claim before reaching the
remaining 
cross-claims, 
counterclaims, 
and 
third-party 
claims. 
77 So. 3d at 137 ("[T]he trial court did not exceed its
discretion by declining to resolve all the pending claims ...
'until such time as Pavilion has either perfected or waived
its right to redeem [the property].'").  In both Pavilion II
and Pavilion III, however, we dismissed the appeals because we
22
1141259, 1141416
concluded that, in each instance, the trial court's order,
although certified as final under Rule 54(b), did not entirely
dispose of Pavilion's redemption claim.  We explained that,
under the trial court's previous orders, the failure to
address certain issues concerning lawful charges and revived
liens "would require Pavilion to make a redemption decision
without full knowledge of the liabilities it would be assuming
by doing so."  142 So. 3d at 542.  Thus, we stated that "all
the outstanding potential 'interest[s] should be addressed by
the trial court before we consider an appeal of a judgment
deciding the redemption claim.'" 142 So. 3d at 542 (quoting
Pavilion II, 77 So. 3d at 137).  
Following Pavilion III, the trial court ordered the
parties to brief all issues related to the liabilities
Pavilion would be assuming upon redemption.  It attempted to
address each such issue in its order.  Furthermore, the trial
court entered a blanket denial of any claims related to
Pavilion's redemption that were not specifically addressed by
its order.  Again, it certified its order as final.  Thus,
this order fully resolved Pavilion's redemption claim,
including related lawful charges and other liabilities, and
23
1141259, 1141416
Pavilion's redemption decision may now be made with "full
knowledge of the liabilities it would be assuming by doing
so."
Pavilion, however, claims that the trial court's order is
still not a final judgment.  First, Pavilion argues that the
judgment fails to adjudicate its redemption claim as to the
City of Huntsville's easement.  That simply is not correct. 
As to Huntsville's easement, the trial court stated: 
"Judge Vance found that Pavilion and the City of
Huntsville stipulated that nothing would be owing to
the City of Huntsville upon redemption of the
subject property, as the City paid nothing for its
easement deed, has made no improvements, has paid no
fees, and is not otherwise entitled to any lawful
charges.  The court adopts this finding."
Moreover, the trial court ordered that, upon Pavilion's
payment of the redemption amount to the clerk of court, "the
parties hereto who hold an interest in the subject property
shall within 14 days therefrom execute and deliver to the
clerk a deed conveying their respective interest therein to
Pavilion ...." 
 Pavilion's redemption 
claim as 
to 
Huntsville's
easement was adjudicated.
Next, Pavilion argues that the judgment is not final
because Pavilion claims setoffs against the development
24
1141259, 1141416
mortgage held by Pace that it contends have not been
adjudicated.  The amount of the development loan was addressed
by this Court in Pavilion II:
"Finally, the trial court's order stated that
the development mortgage Gallop executed in favor of
Pace as part of the April 1995 settlement agreement
would be revived upon redemption and thereafter
remain a superior lien upon the property. ...
However, the trial court did not determine the
balance of the loan secured by the development
mortgage. ...  Pavilion argues that the trial
court's failure to decide the balance due on the
loan secured by the development mortgage would
likely result in a subsequent foreclosure action
involving issues intertwined with the issues in this
case and that the trial court's Rule 54(b)
certification was accordingly improper.  We agree
that the trial court should rule on this issue
before we consider an appeal of the other elements
of the trial court's judgment."
77 So. 3d at 138.
In its most recent brief to the trial court, Pavilion
argued that it was entitled to a credit against the
development loan in the amount of $140,000 that JBJ had
received for the sale of four lots during the redemption
period.  Pavilion argued that this credit and other setoffs
resulted in the development loan being paid off and
extinguished 
before 
the 
commencement 
of 
this 
litigation, 
i.e.,
that the balance on the development loan was $0.  Despite this
25
1141259, 1141416
argument, the trial court concluded that the balance on the
development loan was $200,000.  Thus, rather than being left
unadjudicated, 
Pavilion's setoff 
issues 
were 
in 
fact
adjudicated adversely to Pavilion.  Accordingly, the judgment
of the trial court was properly certified as final under Rule
54(b).
B.  EB Investments' Appeal (Case No. 1141259)
EB Investments raises two issues on appeal.  First, it
contends that the trial court's order permitting Pavilion to
redeem the property was in error because, EB Investments
alleges, Pavilion did not comply with the procedures provided
in the redemption statute, § 6-5-252, Ala. Code 1975.  Second,
EB Investments argues that the trial court improperly entered
various restraining orders and injunctions that this Court
should dissolve. 
1.  Compliance with § 6-5-252
EB Investments contends that Pavilion was not entitled to
redeem the property because, it says, Pavilion did not comply
with § 6-5-252.   Specifically, it contends that Pavilion did
5
JBJ, Pace, and the Pace family filed an appellees' brief
5
in case no. 1141259 adopting EB Investments' argument as to
Pavilion's compliance with § 6-5-252.
26
1141259, 1141416
not name all necessary parties to the redemption action within
one year of the foreclosure sale.   Section 6-5-252 provides,
6
in part:
"Anyone 
desiring 
and 
entitled 
to 
redeem 
may 
make
written demand of the purchaser or his or her
transferees for a statement in writing of the debt
and all lawful charges claimed by him or her, and
such purchaser or their transferees shall, within 10
days after such written demand, furnish such person
making the demand with a written, itemized statement
of all lawful charges claimed by him or her.  The
redeeming party must then tender all lawful charges
to the purchaser or his or her transferee.  ...
"Tender or suit must be made or filed within one
year from foreclosure."
EB Investments notes that, although Pavilion's suit was
filed within one year from the foreclosure,  not all 
7
interested parties were initially named as defendants.  A
mortgagee of JBJ, Jacobs Banks, and the transferee of a
EB 
Investments' 
brief 
alludes 
to 
other 
alleged 
procedural
6
deficiencies with Pavilion's redemption lawsuit, and some of
those arguments have been raised in prior appeals to this
Court but have not been reached on their merits.  See, e.g.,
Pavilion I, 979 So. 2d at 39-40 (See, J., concurring specially
and addressing various arguments concerning Pavilion's
compliance with § 6-5-247 et seq., Ala. Code 1975, raised by
JBJ).  In this appeal, however, EB Investments advances only 
the argument that Pavilion failed to timely name all necessary
parties.
The 
foreclosure 
occurred 
on 
March 
22, 1996; 
the 
complaint
7
for redemption was filed on March 21, 1997.
27
1141259, 1141416
drainage easement, the City of Huntsville, were not named as
parties within the one-year period.  Several months after the
filing of its complaint, but after the one-year period,
Pavilion 
substituted 
Huntsville 
and 
Jacobs 
Bank 
for
fictitiously named defendants.  EB Investments contends that
this substitution was not effective to meet the requirement of
§ 6-5-252 that "suit must be ... filed within one year from
foreclosure."  EB Investments continues that, because
piecemeal redemption is not permitted under Alabama law,
Pavilion's alleged failure to timely add all 
necessary parties
to its redemption action within one year of foreclosure is
fatal to its redemption claim.  We disagree.
We note that "[t]his Court has held that redemption
statutes will be liberally construed in favor of redemption." 
Watts v. Rudulph Real Estate, Inc., 675 So. 2d 411, 413 (Ala.
1996).  EB Investments has cited no authority indicating that
the relation-back principles of Rule 9(h), Ala. R. Civ. P., do
not apply in a redemption action.  See Peacock v. Clay, 831
So. 2d 33 (Ala. Civ. App. 2001) (holding that amendment
substituting plaintiff related back to filing of redemption
action).  Nor has EB Investments established that Pavilion
28
1141259, 1141416
failed to exercise due diligence in discovering Huntsville's
and Jacobs Bank's interests in the property.  See Tucker v.
Nichols, 431 So. 2d 1263, 1265 (Ala. 1983) (noting that
appellant has affirmative duty of showing error upon the
record and that this Court will not presume error). 
Accordingly, we find no error in the trial court's order
permitting Pavilion to substitute Jacobs Bank and Huntsville
for fictitiously named defendants in its original complaint
and relating that substitution back to the date of the filing
of the redemption action.8
2.  Appeal from order granting injunctive relief
EB Investments also asks this Court to vacate a
preliminary injunction entered by the trial court in January
2004.  The preliminary injunction enjoined EB 
Investments 
from
conducting any further transactions concerning the real
property, subject to this litigation.   This preliminary
9
injunction was an interlocutory order, and it has never been
The 
doctrine 
of 
relation-back 
presumably 
would 
not 
excuse
8
a redemptioner's failure to comply with other conditions
precedent to statutory redemption, such as the demand for and
tender of lawful charges.  Such issues, however, are not now
before us. 
For further background as to the preliminary injunction,
9
see EB Investments, 930 So. 2d at 504-07.
29
1141259, 1141416
certified as a final order pursuant to Rule 54(b), Ala. R.
Civ. P.  As to this same order, we noted in EB Investments
that, 
"under 
Rule 
4(a)(1)(A), 
Ala. 
R. 
App. 
P., 
EB
[Investments] had an appeal as of right, which it did not
exercise, from 'any interlocutory order granting, continuing,
modifying, refusing, or dissolving an injunction, or refusing
to dissolve or to modify an injunction.'" 930 So. 2d at 509. 
Accordingly, EB Investments' challenge to the interlocutory
injunction is untimely.  See Momar, Inc. v. Schneider, 823 So.
2d 701 (Ala. Civ. App. 2001).  Therefore, we have no
jurisdiction to entertain EB Investments' appeal of the
preliminary injunction.  See Thomas v. Merritt, 167 So. 3d
283, 289-90 (Ala. 2013).  Therefore, insofar as EB Investments
purports to appeal from the preliminary injunction, 
the 
appeal 
is dismissed.
C.  Pavilion's Appeal (Case No. 1141416)
Pavilion contests several aspects of the trial court's
order concerning the lawful charges due to redeem the
property.  We consider each argument in turn.
1.
Whether the trial court erred in ordering Pavilion
to pay the full amount of the Pace mortgage in order
to redeem the property
30
1141259, 1141416
Pavilion first argues that it was error for the trial
court to order it to pay the full principal balance of the
Pace mortgage.  Section 6-5-253(a)(4) provides, in pertinent
part: "If the redemption is made from a person who at the time
of redemption owned the debt for which the property was sold,
the redemptioner must also pay any balance due on the debt,
with interest ... thereon to date."  In this case the trial
court concluded that Pace and JBJ, general partnerships
composed of the same three members of the Pace family, were
the same legal entity.  Thus, the court concluded that JBJ
"owned the debt for which the property was sold" and,
therefore, held that Pavilion was required to pay the full
balance due on the debt in order to redeem.  Pavilion does not
challenge this basic holding but, rather, attacks 
the 
validity
of the debt.      
Pavilion contends that the $1,735,000 promissory note
given by Gallop to Pace in 1991 and secured by a mortgage in
the 
same 
amount 
represented 
mostly 
unrealized 
expected 
profit. 
Pavilion contends that the original 1991 Pace mortgage
actually secured three things: (1) the value of the land, (2)
five years' prepaid interest, and (3) Pace's expected future-
31
1141259, 1141416
development profit.  Because no profit was actually realized
on the development and because not all the interest became due
prior to the foreclosure, Pavilion argues that it was error
for the trial court to order Pavilion to satisfy the full
principal balance of the Pace mortgage.  We disagree.
In 1991, as part of an arm's-length transaction between
two business entities, Gallop executed a promissory note to
Pace in the amount of $1,735,000.  The note was secured by a
mortgage in the same amount.  In 1995, Gallop filed for
bankruptcy still owing $1,439,010 on the promissory note.  In
a settlement agreement approved by the bankruptcy court,
Gallop agreed that it was lawfully indebted to Pace in the
amount of $1,439,010.  Under the terms of that agreement, in
order to secure the debt, Gallop gave Pace a new mortgage in
the amount of $1,439,010.  The bankruptcy court's order
approving the agreement specifically found that the agreement
was made "in good faith and [was] the subject of arms length
negotiation" in which the parties "substantially compromised
their respective positions."  Whatever the merits of
Pavilion's claim that the original mortgage did not secure
"current 
debt" 
because 
it 
encompassed 
unrealized 
future 
profit
32
1141259, 1141416
and interest, the origins of the debt are absolutely
irrelevant once reduced to a judicially approved, good-faith
compromise of a disputed claim.  Pavilion has cited no
authority supporting such a collateral attack on the court-
approved bankruptcy settlement and associated mortgage.   See
10
Travelers Indem. Co. of Illinois v. Griner, 809 So. 2d 808,
813 (Ala. 2001) ("A collateral attack of the bankruptcy
court's order is not proper.").  Accordingly, we hold that the
trial court did not err in ordering Pavilion, pursuant to § 6-
5-253(a)(4), to satisfy the full balance of the Pace mortgage
in order to redeem the property.
2.
Whether the trial court erred in ordering Pavilion
to pay post-foreclosure mortgages in an amount
greater than the $100,000 foreclosure bid
Next, Pavilion argues that the trial court erred in
ordering it to pay post-foreclosure mortgages beyond the
$100,000 foreclosure purchase price.  Section 6-5-253(a)(5),
Ala. Code 1975, provides:
"(5) Mortgagees of the purchaser, or their
transferees, are considered transferees of the
purchaser, and a party redeeming must pay all
mortgages made by the purchaser or his or her
Falls v. U.S. Savings Loan & Bldg. Co., 13 So. 25 (Ala.
10
1892), cited by Pavilion, is inapposite.
33
1141259, 1141416
transferee on the land to the extent of the purchase
price.
"If the purchaser's mortgages do not exceed the
amount of the purchase price, the balance must be
paid to the purchaser."
(Emphasis added.)  The trial court's order required Pavilion
to pay $558,673.36 to satisfy the Atlantis mortgages now owned
by EB Investments and to pay $61,636 to satisfy the Atlantis
mortgage on Lot 12, Block 1, now held by JBJ.  Because § 6-5-
253(a)(5) provides that the redeeming party must pay all post-
foreclosure mortgages "to the extent of the purchase price,"
Pavilion contends that the trial court had no authority to
require it to pay post-foreclosure mortgages beyond the
$100,000 purchase price.  Again, we disagree.
As noted above, the trial court concluded that Pace and
JBJ were the same legal entity.  Thus, JBJ was the mortgagee
of the Pace mortgage foreclosed upon.  We have stated that
"when the mortgagee buys at foreclosure sale, the amount of
the debt secured by the mortgage is treated as the purchase
price rather than the amount bid."  Garvich v. Associates Fin.
Servs. Co. of Alabama, Inc., 435 So. 2d 30, 34 (Ala. 1983). 
In this case, the mortgage secured a debt of $1,439,010. 
Accordingly, the trial court did not err in finding the full
34
1141259, 1141416
amount of the post-foreclosure mortgages constituted a lawful
charge under § 6-5-253(a)(5).11
3.  Whether the trial court erred in assessing lawful
charges for permanent improvements
The trial court awarded lawful charges related to houses
constructed on three of the lots that were subdivided and sold
during the redemption period.  Atlantis constructed or
partially constructed a house on lot 2 and a house on lot 12,
and the Nelsons constructed a house on their lot.  Pavilion
argues that the construction, or partial construction, of
those houses does not constitute "permanent improvements"
within the meaning of § 6-5-253(a)(1).
"'We have indicated that necessary
permanent improvements have a well defined
meaning in this jurisdiction, which is to
preserve the property by properly keeping
it in repair for its proper and reasonable
use, having due regard for the necessities
of each subject as to its kind and
character.  This includes not only ordinary
Pavilion also argues that the award of lawful charges
11
representing the purchase 
price 
for the Pourhassani and Nelson
lots was error because those charges, combined with the post-
foreclosure mortgages, exceeded the $100,000 purchase price. 
Section 
6-5-253(a)(5), 
however, 
applies 
only 
to 
mortgages, 
not
to the price paid by a purchaser from the foreclosure-sale
purchaser.  Pavilion has not argued that a post-foreclosure
purchase price paid to a foreclosure purchaser or his or her 
transferees is not a lawful charge under § 6-5-253.  Thus, we
do not address these charges.  
35
1141259, 1141416
repairs to restore the property after
injury, decay, storm, flood, or fire, etc.,
but also valuable and useful additions and
improvements to the property suited to its
reasonable necessities, character and use.
....  As to this each case is ruled by its
facts.'
"[Rodgers v. Dixon], 239 Ala. [72,] 74, 193 So.
[741,] 743 [(1940)].  In Smith v. Sulzby, 204 Ala.
301, 87 So. 823 (1921), this Court stated: 'An
improvement, generally speaking, is anything that
enhances the value of the land.'"
Moore v. Horton, 491 So. 2d 921, 923 (Ala. 1986) (emphasis
omitted).  In this case, we hold that the houses constructed
upon lots subdivided for the purpose of  residential
development 
were 
"valuable 
and 
useful 
additions 
and
improvements to the property suited to its reasonable
necessities, character and use."  Thus, the values of those
improvements was recoverable as lawful charges under § 6-5-
253(a)(1).
Pavilion also contends that the trial court erred in
assessing the costs 
of Atlantis's improvements rather 
than the
reasonable value of those improvements.  See Southeast
Enters., Inc. v. Byrd, 720 So. 2d 873, 877 (Ala. 1998)
(holding that the trial court erred by including the costs of
improvements in the redemption price rather than the
36
1141259, 1141416
reasonable value of the improvements).  Here, the trial court
concluded that "Atlantis has proven at trial the fair market
value of the improvements made upon Lot 2, Block 2, Pavilion
Phase I and Lot 12, Block 1, Pavilion Phase II."  It held that
the "market value of the improvements" was $170,000.  From the
record before us, we cannot say that the trial court's finding
as to the value of Atlantis's improvements was plainly and
palpably wrong.
Finally, Pavilion argues that the assessment of lawful
charges for Atlantis's improvements was error because, it
argues, Atlantis did not timely respond to Pavilion's demand
for lawful charges.  As to this issue, we conclude that there
was sufficient evidence to support the trial court's
conclusion that Atlantis timely provided Pavilion with its
statement of lawful charges.
4.
Whether the trial court erred in including as lawful
charges taxes accrued after the filing of Pavilion's
redemption action
The trial court concluded that all unpaid ad valorem
taxes on lot 2 and lot 12, from the date of foreclosure until
the entry of its judgment, were lawful charges due to be paid
by Pavilion upon redemption.  Further, it appears the trial
37
1141259, 1141416
court also included post-foreclosure taxes paid by JBJ after
the filing of Pavilion's redemption suit as lawful charges. 
Pavilion concedes that taxes paid or assessed are lawful
charges under § 6-5-253(a)(2).  However, it  argues that the
rights of the parties were fixed as of its tender of a
redemption amount, made March 21, 1997.  Thus, Pavilion
contends that the trial court erred in assessing as lawful
charges taxes that were assessed after the date of tender.
"Ordinarily, if the statutory requirements are
met, the date of redemption is deemed to be the date
the complaint to redeem was filed.  Wallace [v.
Beasley], 439 So. 2d 133 [(Ala. 1983)].  The date of
redemption, however, does not occur until the
redeeming party has paid or tendered the amounts
due, given an adequate and valid excuse for not
doing so, 'or shown an inability to ascertain the
amount due, asked the aid of the court in
determining the amount, and offered to pay the
amount.'  Hicklin v. Old Ship African Methodist
Episcopal Zion Church, 574 So. 2d 822, 826 (Ala.
Civ. App. 1990).  Literal compliance with the
statute may be excused under certain circumstances;
otherwise, payment is a condition precedent to
redemption.  See Rhoden v. Miller, 495 So. 2d 54
(Ala. 1986). ....  The party seeking to redeem must
exercise due diligence to ascertain the proper
amount to be tendered, and before one side can seek
the aid of the court, a bona fide disagreement
between the parties regarding the lawful charges
must exist.  Moore [v. Horton, 491 So. 2d 921 (Ala.
1986)]."
Pankey v. Daugette, 671 So. 2d 684, 689-90 (Ala. 1995).
38
1141259, 1141416
In the present case, the trial court made the following
finding of fact:
"When this suit was filed, [Pavilion] only tendered
the sum of $321,714.44 to the Court even though John
Lary, the principal of [Pavilion], was aware from
his search of the records in the Madison County
Probate Court, his review of the Gallop bankruptcy
Settlement Agreement and his study of the Alabama
redemption statutes that the unpaid balance due on
the Gallop debt was more than $1,000,000."
Accordingly, it appears that the trial court concluded that
Pavilion did not have a valid excuse for tendering less than
the amount due for redemption.  Thus, the date of Pavilion's
insufficient tender cannot be considered the redemption date. 
Therefore, we cannot say that the trial court erred in
assessing lawful charges for taxes assessed after that date.
5.
Whether Pavilion was entitled to offset rent and/or
waste
Pavilion contends that it was entitled to rents for
Atlantis's and the Nelsons' use and occupancy of their lots. 
"[A] purchaser in possession of land as purchaser under a
valid foreclosure is the absolute owner and is not chargeable
with rent in respect to another whose rights were foreclosed." 
Wallace v. Beasley, 439 So. 2d 133, 136 (Ala. 1983).  In
Pankey, 671 So. 2d at 689, the Court of Civil Appeals held
39
1141259, 1141416
that "[the redeeming party] could demand only rents and
profits collected by the [purchasers], had any been collected
by them, and the [purchasers] owe no rent to [the redeeming
party] for the time of their occupation of the property."  In
the present case, Atlantis and the Nelsons are transferees in
possession.  They collected no rents.  Furthermore, a
redemptioner is only "'entitled to all rents and profits
accruing subsequent to the redemption date.'"  Givianpour v.
Curtain, 166 So. 3d 662, 667 (Ala. 2014) (quoting Pankey, 671
So. 2d at 689).  As explained above, the redemption date has
yet to occur.  Thus, Pavilion is not entitled to rental credit
against the redemption price under § 6-5-253(c), Ala. Code
1975.
Pavilion also contends that it is entitled to credit for
certain unspecified waste.  Given Pavilion's failure to
specify the waste for which it claims it is due credit, much
less the amount of credit it claims it is due, we conclude
that this issue was not sufficiently presented for appellate
review.  See Rule 28(a)(10), Ala. R. App. P.
6.
Whether the trial court properly calculated interest
40
1141259, 1141416
Pavilion contends that the trial court assessed interest
at the wrong rate.  Section 6-5-253, Ala. Code 1975, provides 
in part:
"Anyone entitled and desiring to redeem real estate
under the provisions of this article must also pay
or tender to the purchaser or his or her transferee
the purchase price paid at the sale, with interest
at the rate allowed to be charged on money judgments
as set forth in Section 8-8-10 (as it is now or
hereinafter may be amended), and all other lawful
charges, also with interest as aforesaid ....
"....
"If the redemption is made from a person who at
the time of redemption owned the debt for which the
property was sold, the redemptioner must also pay
any balance due on the debt, with interest as
aforesaid thereon to date."
§ 6-5-253 (emphasis added).  Effective September 1, 2011, § 8-
8-10, Ala. Code 1975, was amended to reduce the statutory rate
of interest on money judgments from 12% per annum to 7.5% per
annum.  Although it is not entirely clear at what rate all the
interest awarded by the trial court was calculated, it appears
that the trial court calculated at least some of the interest
on the purchase price and other lawful charges at the prior
12% interest rate, and, in some instances, at a 6% interest
rate.  The trial court should apply the statutory interest
rate in effect at the time of redemption, which, here, has yet
41
1141259, 1141416
to occur.  Thus, we agree with Pavilion that interest included
in the redemption amount should have been calculated using the
statutory rate currently in effect –- 7.5% per annum -- unless
a contract rate of interest applies to a particular debt. 
Accordingly, the trial court's judgment insofar it calculates
to the interest on the lawful charges due upon redemption is
reversed, and the case is remanded for the trial court to
recalculate interest at the current statutory rate.
Pavilion also contends that the trial court erred in
assessing interest on the value of Atlantis's permanent
improvements.  Section 6-5-253, however, requires interest to
be 
paid 
on 
all 
lawful 
charges, 
including 
permanent
improvements.  Thus, we reject Pavilion's argument in this
regard.  Nor was it error for the trial court to compute
interest through the date of redemption, which, as noted
above, has yet to occur.  See Pankey, 671 So. 2d at 689-90;
Watts v. Rudulph Real Estate, Inc., 740 So. 2d 1085, 1088
(Ala. Civ. App. 1998) (holding that purchaser was entitled to
interest until the date of redeeming party's valid attempt at
redemption).
7.  Whether there was a failure to join a necessary party
42
1141259, 1141416
Pavilion also argues that the trial court erred in
refusing to add John Lary, the sole member of Pavilion, as a
necessary party to Pavilion's redemption suit.  In 1991, Lary,
individually, obtained a judgment against Richard Tracey and
Tracey Enterprises, Inc.  At the time of that judgment, Tracey
and/or Tracey Enterprises owned the property made the basis of
this litigation.  Thus, according to Pavilion, Lary's 
judgment
attached to the property, making him an interested party
necessary to the redemption suit.  However, as the appellees
note, at the time the judgment was recorded, the property had
already passed to Pace through foreclosure, and 
neither 
Tracey
nor Tracey Enterprises held title to the property.  Thus, they
argue that Lary's judgment lien never attached to the property
and that he has no individual interest in the property. 
Pavilion has not disputed Pace's argument.  From the briefs
and record before us, there is no basis on which to conclude
that Lary is a necessary party.
8.
Pavilion's remaining arguments on appeal
Pavilion raises a number of other issues on appeal. 
Those issues include whether the trial court properly
determined the balance of the Pace development loan, whether
43
1141259, 1141416
Gallop was ever in default under the bankruptcy settlement,
and whether Pace provided proper notice of Gallop's default. 
As to these remaining issues, however, Pavilion has cited no
supporting authority.
"Rule 28(a)(10), Ala. R. App. P., requires that
arguments in an appellant's brief contain 'citations
to the cases, statutes, other authorities, and parts
of the record relied on.'  Further, 'it is well
settled 
that 
a 
failure 
to 
comply 
with 
the
requirements of Rule 28(a)(10) requiring citation of
authority in support of the arguments presented
provides this Court with a basis for disregarding
those arguments.'  State Farm Mut. Auto. Ins. Co. v.
Motley, 909 So. 2d 806, 822 (Ala. 2005) (citing Ex
parte Showers, 812 So. 2d 277, 281 (Ala. 2001)). 
This is so, because '"it is not the function of this
Court to do a party's legal research or to make and
address legal arguments for a party based on
undelineated general propositions not supported by
sufficient authority or argument."' Butler v. Town
of Argo, 871 So. 2d 1, 20 (Ala. 2003) (quoting Dykes
v. Lane Trucking, Inc., 652 So. 2d 248, 251 (Ala.
1994))."
Jimmy Day Plumbing & Heating, Inc. v. Smith, 964 So. 2d 1, 9
(Ala. 2007).  Accordingly, we decline to address these issues.
IV.  Conclusion
With regard to the trial court's order holding that
Pavilion is entitled to redeem the property at issue, the
judgment of the trial court is affirmed.  To the extent that
EB 
Investments' appeal 
seeks review 
of 
interlocutory
44
1141259, 1141416
injunctive relief, the appeal is dismissed.  As to Pavilion's
appeal concerning the lawful charges assessed by the trial
court, the judgment is affirmed in all respects except for the
trial court's calculation of interest.  As to the trial
court's award of interest, the judgment is reversed, and the
case remanded for the trial court to recalculate interest at
the current statutory rate.
1141259 -- AFFIRMED IN PART; APPEAL DISMISSED IN PART.
Stuart, Bolin, Parker, Murdock, Shaw, and Bryan, JJ.,
concur.  
Wise, J., recuses herself.
1141416 -- AFFIRMED IN PART; REVERSED IN PART; AND
REMANDED WITH INSTRUCTIONS.
Stuart, Parker, and Shaw, JJ., concur.
Bolin and Bryan, JJ., concur in part and dissent in part. 
Murdock, J., dissents.
Wise, J., recuses herself.  
45
1141259, 1141416
BOLIN, Justice (concurring in part and dissenting in part in 
case no. 1141416).
I concur in the main opinion except as to Part III.C.3.,
regarding permanent improvements, from which I dissent.
46
1141259, 1141416
BRYAN, Justice (concurring in part and dissenting in part in
case no. 1141416).
I concur in the main opinion except as to Part III.C.3. 
As to Part III.C.3., I dissent, and, with respect to the issue
of permanent improvements addressed in Part III.C.3., I agree
with Justice Murdock's analysis as to that issue.
47
1141259, 1141416
MURDOCK, Justice (dissenting in case no. 1141416).
I respectfully dissent because I disagree with certain
conclusions reached in the main opinion as hereinafter
discussed.  As a prelude in some respects for that discussion,
I first note related, but independent, concerns as to the
articulation, or at least the application of, certain rules in
Pavilion Development, L.L.C. v. JBJ Partnership, 77 So. 3d 133
(Ala. 2011) ("Pavilion II"), and Pavilion Development, L.L.C.
v. JBJ Partnership, 142 So. 3d 535 (Ala. 2013) ("Pavilion
III").   
12
In particular, I question this Court's application in
Pavilion II and Pavilion III of the rule that a party may not
effect a piecemeal redemption of property that has been
foreclosed.  In Costa & Head (Birmingham One), Ltd. v.
National Bank of Commerce of Birmingham, 569 So. 2d 360 (Ala.
1990), the case cited for this principle in Pavilion II, the
question presented was whether the redemptioner could redeem
only a portion of the real property in question (in that case,
the land but not the permanent building located on that land)
and whether, by such a piecemeal redemption, the redemptioner
Pavilion II and Pavilion III were each decided by a
12
division of the Court of which I was not a member.
48
1141259 and 1141416
could avoid paying the purchaser at foreclosure the entire
amount of the foreclosure purchase price.  That is not the
situation presented here.  So long as there is not an attempt
to redeem only part of a property in an effort to avoid making
the foreclosure purchaser whole, I question why 
a 
redemptioner
could not redeem foreclosed-upon property subject to the
after-acquired interest of a third party in some or all of it. 
Thus, for example, I question why, in Pavilion II, the
redemptioner could not have foreclosed upon the property
subject to whatever easement rights had been acquired by the
City of Huntsville following the foreclosure sale. For that
matter, and again assuming that the foreclosure purchaser is
reimbursed the full amount paid at foreclosure (plus taxes and
other related expenditures), why could not the redemptioner
redeem the foreclosed-upon property subject to the ownership
interest of a third party (such as Louise and Fritz Nelson in
this case) in one or more lots "sold off" by the foreclosure
purchaser after the foreclosure. Likewise, the same question
may be posed as to the mortgage or lien interest of some third
party that encumbers the property, such as the lien executed
in favor of Pace Properties.  (If that lien is not
49
1141259 and 1141416
subsequently satisfied by proper payment of the debt it
secures, then the redemptioner would simply face a subsequent
foreclosure upon the property.)
That said, I turn now to two of the issues before us in
the present iteration of this case.  First, consistent with
the basic premise of making the foreclosure purchaser whole,
I respectfully disagree with the conclusion reached in Part
III.C.2. of the main opinion.  It appears to me that the
amount of the post-foreclosure mortgages we require the
redemptioner to pay exceeds the limitation imposed by
§ 6-5-253(a)(5), Ala. Code 1975, of "the [foreclosure]
purchase price."
Similarly, I believe we also err in Part III.C.3. of the
main opinion by holding that the redemptioner must pay for the
houses constructed on the property following foreclosure. 
Specifically, we hold today that any improvement that
increases the value of foreclosed property must be paid for by
the redemptioner.  Thus, Pavilion Development, L.L.C.
("Pavilion"), will be required to pay over $1.5 million, plus
interest, for three houses that have been constructed on its
property since the foreclosure.  In so holding, I believe we
50
1141259 and 1141416
depart from the intended meaning of our own statute and leave
the mainstream of understanding as to how redemption from a
foreclosure is supposed to work.  See, e.g., discussion of 55
Am. Jur. 2d Mortgages § 806 (2009) and  59A C.J.S. Mortgages
§ 1446 (2009), infra.
It is one thing to require a redemptioner to pay for
repairs and what are referred to as "necessary ...
improvements" in Moore v. Horton, 491 So. 2d 921, 923 (Ala.
1986), the primary case on this issue cited in the main
opinion.   Indeed, this Court's discussion of improvements in
Moore 
implies 
repairs 
or 
"improvements" 
designed 
to
"preserve," or further, an existing use of the property.  It
is another to allow a purchaser pursuant to a foreclosure, who
has purchased the property with full awareness that it is
subject to redemption for up to one year, to add any
improvement it wishes, regardless of cost or compatibility
with preexisting usage, and force a redemptioner to reimburse
it for the same.  Such an approach will in many cases
effectively defeat the right to redeem.    
The main opinion ends its reference to Moore v. Horton,
by quoting Moore's definition of "improvement" as "'"anything
51
1141259 and 1141416
that enhances the value of the land."'"  ___ So. 3d at ___
(quoting Moore, 491 So. 2d at 923).  But what constitutes a
"necessary 
... 
improvement" 
and 
what 
constitutes 
an
"improvement" are two different things.   The quoted passage
from Moore offers a definition of the latter term only in aid
of its explanation of what is meant by a "necessary
improvement":
"[W]e note that this Court, in Rodgers v. Dixon, 239
Ala. 72, 193 So. 741 (1940), stated:
"'We have indicated that necessary
permanent improvements have a well defined
meaning in this jurisdiction, which is to
preserve the property by properly keeping
it in repair for its proper and reasonable
use, having due regard for the necessities
of each subject as to its kind and
character. This includes not only ordinary
repairs to restore the property after
injury, decay, storm, flood, or fire, etc.,
but also valuable and useful additions and
improvements to the property suited to its
reasonable necessities, character and use.
Snow v. Montesano Land Co., 206 Ala. 310,
89 So. 719 [(1921)]; Smith v. Sulzby, 205
Ala. 301, 87 So. 823 [(1921)];  41 C.J. p.
645, § 649 et seq. Ewing v. First Nat.
Bank, 227 Ala. 46, 148 So. 836 [(1933)];
Malone v. Nelson, 232 Ala. 243, 167 So. 714
[(1936)]. As to this each case is ruled by
its facts.'"
Moore, 491 So. 2d at 923 (some emphasis omitted; some emphasis
added).
52
1141259 and 1141416
The "necessary permanent improvements" of which Moore
speaks might include such things as the replacement of a roof
or perhaps the replacement of fixtures necessary to the
continued functioning of a property in the mode in which it
was functioning at the time of foreclosure, e.g., a new air-
conditioning system, or perhaps even terraces or a levee to
prevent flooding or erosion of farmland, or possibly even new
landscaping to enable a business to continue to attract
customers.  But would it include, like here, an entirely new
house on a previously vacant lot?  If so, what else might it
include?  Could a foreclosure purchaser who paid $100,000 for
an old house and a couple of acres of land erect a new
10-story office building costing millions of dollars and
thereby thwart any right of redemption from a homeowner who
had hoped to redeem and return to his home?  Are not the type
of necessary improvements for which a redemptioner is
responsible limited to those "improvements" and repairs in
keeping with the usage and "necessities" of the property at
the time of foreclosure?  Or as Moore put it, "improvements to
the property suited to its reasonable necessities, character
and use" at the time of foreclosure.  491 So. 2d at 423 (some
53
1141259 and 1141416
emphasis omitted).  See, e.g., Durr Drug Co. v. Acree, 241
Ala. 391, 2 So. 2d 903 (1941) (explaining that "improvements"
for which a redemptioner was responsible included a new roof
and termite-control treatments).  See generally Smith v.
Sulzby, 205 Ala. 301, 302-03, 87 So. 823, 824 (1921)
("'Improvements' include 'repairs,' ....").
Cases explain that requiring the redemption payoff to
include any new structure or use that increases the fair-
market value of the property, no matter how expensive or out
of sync with the "necessities, character and use" of the
property at the time of foreclosure, would constitute what is
referred to as a "burdening" of the right of redemption. 
Thus, in Hoffman v. Jordan, 263 Ala. 23, 29, 81 So. 2d 546,
551-52 (1955), this Court explained: 
"The suit in this case was filed on August 4,
1943, and W.B. Hoffman was served on August 6, 1943.
He testified that when he built what is known as the
little house and the lean-to to the old house, he
knew that suit was pending and that he made these
improvements in the summer of 1951.  In the case of
McQueen v. Whetstone, 127 Ala. 417, 30 So. 548, 552
[(1900)], with respect to improvements the rule was
stated by this court as follows: 
"'The rule as to improvements on land
by the mortgagee, as stated by Mr. Jones
is:  "That the mortgagee will not be
allowed for them further than is proper to
54
1141259 and 1141416
keep the premises in necessary repair.
Unreasonable 
improvements 
may 
be 
of
permanent benefit to the estate; but unless
made with the consent and approbation of
the mortgagor, no allowance can be made for
them. The mortgagee has no right to impose
them upon the owner, and thereby increase
the burden of redemption."'"
(Emphasis added.) See also, e.g., Malone v. Nelson, 232 Ala.
243, 247, 167 So. 714, 718 (1936) (improvements, which  had
value of $665.50, allowed where they were "needed, and
reasonable, and permanent" improvements and purchase price of
property was $6,500); 
compare 
Southeast Enters., Inc. v. Byrd,
720 So. 2d 873, 874 (Ala. 1998) (improvements costing $102,000
made to property for which other costs of redemption,
including debtor's original purchase price, totaled about $1
million).
Hewing to the foregoing understanding of what is properly 
reimbursed in a redemption would keep Alabama aligned with
redemption law generally throughout the nation.  The general
rule is concerned with not burdening the redemption right to
the point that the right is effectively lost:
"In order to be included in the redemption
price, anything done to the property by the
sheriff's sale purchaser must be necessary, either
to keep the property in the same condition as when
purchased or to avoid civil or criminal liability.
55
1141259 and 1141416
Expenses on the property not serving these ends,
unless consented to by the prospective redemptioner,
cannot be added to the redemption price, regardless
of whether the redemptioner might be benefitted by
that work. Preredemption expenses may not be
included in the redemption price on the sole basis
that those expenses enhanced the value of the
subject property.
"Amounts which have been paid to protect the
premises may be included. Further, the amount
necessary 
for 
redemption 
may 
include 
any
out-of-pocket costs for maintenance, repair, upkeep,
and insurance incurred by a foreclosing mortgagee."
59A C.J.S. Mortgages § 1446 (2009) (emphasis added; footnotes
omitted).
"Where the purchaser of property has given a
mortgage and subsequently defaults on his or her
payments, his or her entire interest in the property
is not forfeited; the mortgagor has the right to
redeem the property by paying the full debt plus
interest and expenses incurred by the creditor due
to default.
"Ordinarily, a court of equity will not decree
redemption from sale of a part of mortgaged property
upon payment of a part of the mortgage. Generally,
the whole mortgage debt must be tendered or paid,
including interest, certain expenses, and any
amounts which have been paid to protect the
premises. ..."
55 Am. Jur. 2d Mortgages § 806 (2009) (emphasis added;
footnotes omitted).13
This guiding notion of a "preservation improvement,"
13
i.e., the use of the term "improvement" in the sense of what
is necessary to "preserve" and perhaps even enhance the
56
1141259 and 1141416
For the foregoing reasons, I respectfully dissent. 
property, but only in its character and use at the time of the
foreclosure sale, is expressly reflected in Alabama's tax-
foreclosure-redemption statute, Ala. Code 1975, § 40-10-122:
"(c) With respect to property which contains a
residential structure at the time of the sale
regardless 
of 
its 
location, 
the 
proposed
redemptioner must pay to the purchaser or his or her
transferee, in addition to any other requirements
set forth in this section, the amounts set forth
below:
"(1) All insurance premiums paid or
owed by the purchaser for casualty loss
coverage on the residential structure with
interest on the payments at 12 percent per
annum.
"(2) The value of all preservation
improvements 
made 
on 
the 
property
determined in accordance with this section
with interest on the value at 12 percent
per annum.
"(d) 
... 
As 
used 
herein, 
'preservation
improvements' shall mean improvements made to
preserve the property by properly keeping it in
repair for its proper and reasonable use, having due
regard for the kind and character of the property at
the time of sale." 
(Emphasis added.)
57