Clarke et al v. Tannin, Inc. et al

Filing 145

ENDORSED ORDER granting 111 Motion for Summary Judgment; granting 112 Motion for Summary Judgment; granting 113 Motion for Summary Judgment; granting in part and denying in part 114 Motion for Summary Judgment; granting 115 Motion for Summary Judgment; denying 116 Motion for Summary Judgment; denying as moot 131 Motion to Strike. Signed by District Judge William H. Steele on 3/14/2018. (tgw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
KENDALL CLARKE, et al.,
Plaintiffs,
v.
TANNIN, INC., et al.,
Defendants.

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) CIVIL ACTION 16-0572-WS-M
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ORDER

This matter is before the Court on the defendants’ motions for summary
judgment. (Docs. 111-16). The parties have filed briefs and evidentiary materials
in support of their respective positions, (Docs. 111-16, 120-30, 132), and the
motions are ripe for resolution. After careful consideration, the Court concludes
the motions are due to be granted in part and denied in part.
BACKGROUND
The remaining defendants are Tannin, Inc. (“Tannin”) and George
Gounares, the owner of Tannin.1 The remaining plaintiffs2 are five couples and
two individuals,3 all purchasers of property in the development known as the
Village of Tannin (“the Village”). The Village lies just north of, and adjacent to,
Highway 182 in Orange Beach, Alabama. The Gulf of Mexico (“the Gulf”) is
1

All other defendants have been dismissed on the parties’ joint stipulations.
(Docs. 80, 96).
2
3

Two plaintiffs have been dismissed on the parties’ joint stipulation. (Doc. 108).

The remaining plaintiffs are: Kendall Clarke; José and Jill Rivera; Austin and
Lee Boyd; Gary and Anna Schulte; Michael Gray and Sue Ellen Johnston (“the Grays”);
Jimmy and Kym Black; and Daniel Johnson.

south of Highway 182. According to the complaint, (Doc. 1), the defendants
represented to the plaintiffs that, by purchasing land in the Village, they would
have deeded access to the Gulf via a 41-foot-wide strip of land (“the Parcel”)
extending from the south side of Highway 182 to the Gulf. These representations
were made repeatedly from 1989 to 2015, during which time the plaintiffs enjoyed
unfettered beach access via the Parcel, including vehicular access. In July 2015,
the defendants placed a locked gate across the northern end of the Parcel and
thereafter limited the plaintiffs’ beach access to foot traffic. When Village
property owners complained, the defendants responded that they (the defendants)
owned the Parcel, that no Village property owner had been conveyed deeded
access to the Parcel, and that, prior to a May 2015 Grant of Right to Use Land
(“the Grant”), the defendants had merely permitted owners to use the Parcel for
beach access. The Grant purported to vest the Village of Tannin Association (“the
Association”) with a right of access to a five-foot width of the Parcel extending the
full length of the Parcel.
The plaintiffs “bring this litigation to acquire the access rights they were
promised, and to recover money damages for the Tannin Defendants’ false and
misleading sales practices.” (Doc. 1 at 5). The complaint includes six causes of
action: (1) Interstate Land Sales Full Disclosure Act (“ILSA”); (2) declaratory
judgment; (3) easement by prescription; (4) fraud; (5) breach of warranty; and (6)
breach of fiduciary duty. The defendants seek summary judgment as to all
claims.4
DISCUSSION
Summary judgment should be granted only if “there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.”
4

The defendants have filed separate sets of briefs. However, Gounares relies
principally on Tannin’s briefing as to Counts One through Four, and he is not a defendant
under Count Five. (Doc. 1 at 17). The Court therefore references Gounares’s briefs
primarily with respect to Count Six, as to which he is the only defendant.
2

Fed. R. Civ. P. 56(a). The party seeking summary judgment bears “the initial
burden to show the district court, by reference to materials on file, that there are no
genuine issues of material fact that should be decided at trial.” Clark v. Coats &
Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The moving party may meet its
burden in either of two ways: (1) by “negating an element of the non-moving
party’s claim”; or (2) by “point[ing] to materials on file that demonstrate that the
party bearing the burden of proof at trial will not be able to meet that burden.” Id.
“Even after Celotex it is never enough simply to state that the non-moving party
cannot meet its burden at trial.” Id.; accord Mullins v. Crowell, 228 F.3d 1305,
1313 (11th Cir. 2000); Sammons v. Taylor, 967 F.2d 1533, 1538 (11th Cir. 1992).
“When the moving party has the burden of proof at trial, that party must
show affirmatively the absence of a genuine issue of material fact: it must support
its motion with credible evidence ... that would entitle it to a directed verdict if not
controverted at trial. [citation omitted] In other words, the moving party must
show that, on all the essential elements of its case on which it bears the burden of
proof, no reasonable jury could find for the nonmoving party.” United States v.
Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 1991) (en banc)
(emphasis in original); accord Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115
(11th Cir. 1993).
“If the party moving for summary judgment fails to discharge the initial
burden, then the motion must be denied and the court need not consider what, if
any, showing the non-movant has made.” Fitzpatrick, 2 F.3d at 1116; accord
Mullins, 228 F.3d at 1313; Clark, 929 F.2d at 608.
“If, however, the movant carries the initial summary judgment burden ...,
the responsibility then devolves upon the non-movant to show the existence of a
genuine issue of material fact.” Fitzpatrick, 2 F.3d at 1116. “If the nonmoving
party fails to make ‘a sufficient showing on an essential element of her case with
respect to which she has the burden of proof,’ the moving party is entitled to
summary judgment.” Clark, 929 F.2d at 608 (quoting Celotex Corp. v. Catrett,
3

477 U.S. 317 (1986)) (footnote omitted); see also Fed. R. Civ. P. 56(e)(2) (“If a
party fails to properly support an assertion of fact or fails to properly address
another party’s assertion of fact as required by Rule 56(c), the court may …
consider the fact undisputed for purposes of the motion ….”).
In deciding a motion for summary judgment, “[t]he evidence, and all
reasonable inferences, must be viewed in the light most favorable to the
nonmovant ….” McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1243
(11th Cir. 2003). “Therefore, the plaintiff’s version of the facts (to the extent
supported by the record) controls, though that version can be supplemented by
additional material cited by the defendants and not in tension with the plaintiff’s
version.” Rachel v. City of Mobile, 112 F. Supp. 3d 1263, 1274 (S.D. Ala. 2015),
aff’d, 633 Fed. Appx. 784 (11th Cir. 2016).
There is no burden on the Court to identify unreferenced evidence
supporting a party’s position.5 Accordingly, the Court limits its review to the
exhibits, and to the specific portions of the exhibits, to which the parties have
expressly cited. Likewise, “[t]here is no burden upon the district court to distill
every potential argument that could be made based upon the materials before it on
summary judgment.” Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 599
(11th Cir. 1995); accord Gennusa v. Canova, 748 F.3d 1103, 1116 (11th Cir. 2014).
The Court accordingly limits its review to those arguments the parties have
expressly advanced.
The plaintiffs identify Counts Two, Three and Five as designed to establish
that the defendants have no legal authority to restrict their beach access, with
5

Fed. R. Civ. P. 56(c)(1)(A) (“A party asserting that a fact cannot be or is
genuinely disputed must support the assertion by … citing to particular parts of materials
in the record ….”); id. Rule 56(c)(3) (“The court need consider only the cited materials,
but it may consider other materials in the record.”). “[A]ppellate judges are not like pigs,
hunting for truffles buried in briefs,” and “[l]ikewise, district court judges are not
required to ferret out delectable facts buried in a massive record ….” Chavez v.
Secretary, Florida Department of Corrections, 647 F.3d 1057, 1061 (11th Cir. 2011)
(internal quotes omitted).

4

Counts One, Four and Six arguing for relief in the event the defendants do possess
such authority. (Doc. 120 at 2). The Court therefore addresses first the claims
challenging the defendants’ ability to restrict the plaintiffs’ use of the Parcel.
It is uncontroverted that the owner of record of the Parcel has at all relevant
times been Tannin. It is also uncontroverted that the only relevant transfer of
record of any interest in the Parcel is the May 2015 Grant from Tannin to the
Association, which is limited to a five-foot swath. The plaintiffs nevertheless
maintain that they possess a legally protected property interest in the entirety of
the Parcel, which interest precludes the defendants from cutting off their vehicular
access to the Parcel.
I. Count Two – Declaratory Judgment.
The plaintiffs base their demand for declaratory relief on three legal
theories: common-law dedication, dedication by estoppel, and “scheme of
development.” (Doc. 1 at 15; Doc. 121 at 1). As discussed below, the defendants
are entitled to summary judgment as to all three theories and thus as to Count Two
in toto.
A. Common-Law Dedication.
“A ‘dedication’ is a donation or appropriation of property to the public use
by the owner.” Ritchey v. Dalgo, 514 So. 2d 808, 810 (Ala. 1987) (internal quotes
omitted). Common-law dedication “is accomplished when there have been acts
which evidence an unequivocal intent by the owner to dedicate the property to a
public use and an acceptance by the members of the public of the property for that
public use.” Id. (emphasis in original).
“The public is a necessary party to any dedication, there being no such
thing as a dedication to an individual.” Ritchey, 514 So. 2d at 810 (internal quotes
omitted). Indeed, and as the plaintiffs concede, “there is no such thing as a
dedication to … a limited group of persons.” (Doc. 121 at 4). Rather, a dedication
5

“must be for the benefit of the public, and not for any particular part of it.”
Stringer Realty Co. v. City of Gadsden, 53 So. 2d 617, 619 (Ala. 1951) (internal
quotes omitted). That is, “the essence of a dedication to public uses is that it shall
be for the use of the public at large.” Id. (emphasis added, internal quotes
omitted). Again the plaintiffs concur, acknowledging that dedication must be to
“the general public.” (Doc. 121 at 4).
Alabama cases have repeatedly emphasized that dedication cannot work in
favor of a select subset of the public at large, such as those who purchase nearby
property from a common owner. According to Stringer Realty, “a grant by the
owner of a private right of way over his lands to buyers of different parcels of the
same to furnish them with convenient access to the street is no dedication to public
use.” 53 So. 2d at 619 (internal quotes omitted). According to Trustees of
Howard College v. McNabb, 263 So. 2d 664 (Ala. 1972), a valid dedication of
land as a public park or parkway “must be for the benefit of the public at large,
and open for the use and enjoyment of everyone, rather than for the use of those
few individuals who own the adjoining property,” such that “the private nature of
the alleged rights granted [to adjoining landowners only] precludes a finding that
this property has been dedicated as a public park.” Id. at 671-72. And according
to Garland v. Clark, 88 So. 2d 367 (Ala. 1956), there was no dedication to the
public of a parking area adjoining a non-public, church cemetery when only those
owning cemetery lots or with other permission to use a cemetery lot used the
parking area. Id. at 370-71; accord Ledlow v. City of Pell City, 497 So. 2d 86, 88
(Ala. 1986) (“The dedication of property as a public cemetery requires an
intention to devote the property to the public at large ….”) (citing Garland).
As the defendants note, (Doc. 112 at 2-4), the plaintiffs have no evidence
that the defendants intended to open the Parcel to use by the public at large. Their
evidence is, at best, that the defendants authorized only the plaintiffs, other Village
property owners, and a select few others to use the Parcel. There is not a shred of
evidence that the defendants intended to, or did, authorize the public at large to use
6

the Parcel. On the contrary, the plaintiffs agree that the defendants took pains to
prevent the public at large from using the Parcel, keeping it fenced on both sides
and with signs at the northern (highway) end proclaiming the Parcel to be “private
property” for use by Tannin or the Village only and at the southern (beach) end
announcing “private beach.” (Doc. 111-17 at 10; Doc. 111-21 at 23; Doc. 111-22
at 8; Doc. 112-3; Doc. 112-5). As the cases discussed above reflect, such evidence
is patently insufficient to support a common-law dedication. See Stringer Realty,
53 So. 2d at 619 (“To describe a tract of land as ‘Private Park’ appears to indicate
the opposite of public use.”).
The plaintiffs note that the plat of the Village (“the Plat”) depicts the Parcel
and labels it as “Beach Access.” (Doc. 111-31 at 1, 3). This language, they say,
“correspond[s] with” the phrases, “Sand Beach” and “community beach” used on
the plats of the property at issue in Ritchey, where the Court found the evidence
sufficient to support a common-law dedication. (Doc. 121 at 6). The Ritchey
Court, however, did not rely on the term “sand beach” as indicating an intent to
dedicate the area to the public at large. 514 So. 2d at 813. While the Court did
rely on the “community beach” language, id., that adjective on its face connotes
access by the public. In contrast, the term “beach access” does nothing to identify
who has such access and, in the context of a plat of the Village, it could hardly be
read to mean anything other than access by Village property owners.
This obvious conclusion is only bolstered by the plaintiffs’ reliance on the
language of the Village declaration (“the Declaration”) for its “corresponding”
statement, (Doc. 121 at 8), that “Tannin is near the Gulf of Mexico and has access
to it.” (Doc. 111-30 at 5). Reading the Declaration in conjunction with the Plat,
as the plaintiffs demand, renders it inescapable that the “beach access” mentioned
in the Plat is the “access” of “Tannin,” not the public at large.
As noted, to sustain a common-law dedication, the evidence of the
defendants’ intent to dedicate the Parcel to the public at large must be
“unequivocal.” This is not a low threshold. “To establish a dedication, the
7

clearest intention on the part of the owner to that effect must be shown, and the
evidence must be clear and cogent, and the acts of the owner relied on to establish
a dedication must be unequivocal in their indication of the owner’s intention to
create a public right exclusive of his own.” Trustees, 263 So. 2d at 670 (emphasis
added, internal quotes omitted). The plaintiffs’ evidence does not come close to
meeting this demanding standard, and no properly functioning jury could find it
satisfied.
B. Dedication by Estoppel.
The plaintiffs quote from Ritchey regarding “the role of estoppel as that
doctrine applies in common law dedication cases,” and they conclude that,
“[u]nder the facts as presented, Defendants should be estopped … from …
restricting the Plaintiffs’ use of the … Parcel.” (Doc. 121 at 7). Ritchey did not
apply an estoppel theory, and it explained neither how such an estoppel arises nor
the relation of estoppel to dedication based on the owner’s conduct as discussed in
Part I.A. However, Ritchey quoted from Sam Raine Construction Co. v. Lakeview
Estates, Inc., 407 So. 2d 542 (Ala. 1981), which addresses these issues in more
detail.
Sam Raine considered whether there was sufficient evidence to reach a jury
that a particular road had become a public way. This can occur in any of three
ways: a regular proceeding for that purpose, general use by the public for twenty
years, or “by a dedication as such by the owner of the land the way crosses, with
acceptance by the proper authorities.” 407 So. 2d at 544. The evidence ruled out
the first two possibilities, leaving the plaintiff to show a common-law dedication.
Id. Citing Trustees, the Court acknowledged that, “to constitute a dedication at
common law, there must of course be an intention of the owner to dedicate the
property ….” Id. at 548. The Court also acknowledged that “[t]he owner must
unequivocally intend to create a public right exclusive of his own.” Id. at 544
(emphasis added, internal quotes omitted).
8

The Sam Raine Court then identified common-law dedications as “either
expressed or implied,” with the latter “aris[ing] when the acts or conduct of the
owner are deemed to intend a dedication to the public use, such an implication
being founded on the doctrine of estoppel in pais rather than by estoppel in grant.”
Id. “Once the public accepts the dedication by its use of the land, the owner will
be estopped to deny the dedication without a clear showing that his acts were
erroneously construed as intending to dedicate.” Id. at 544-45. As to what acts or
conduct by the owner suffice to support an estoppel, the Court turned to a 1903
decision from Kentucky, which indicates that, “[i]f … the owner suffers the public
to use the passway, knowing it is claiming it as a matter of right, the law presumes
a dedication to the public, and presumes the dedicator’s intention to be in accord
with the public’s use,” regardless of “whether there has been in fact an actual
dedication to the public.” Id. at 545 (internal quotes omitted). The idea is that if
the owner “suffer[s] the public generally to so use his land as a passway, under a
notorious claim of right, for a great length of time,” such that persons have paid an
enhanced price for nearby property on the understanding the way is public, it
would be unfair for the owner to disappoint their understanding. Id. (internal
quotes omitted).
As far as the Court can determine, only Ritchey has cited Sam Raine’s
discussion of estoppel, and Ritchey does not elucidate Sam Raine’s meaning or
application. Nor have the parties done so. The Court finds Sam Raine to be
subject to multiple interpretations, but neither of them assists the plaintiffs. If Sam
Raine is a gloss on Trustees and the other cases discussed in Part I.A, then no
estoppel arises unless the plaintiffs first demonstrate the defendants’ unequivocal
intent to dedicate the Parcel to the public at large. Because, as discussed above,
the plaintiffs cannot do so, no estoppel to deny a dedication can arise.
The other possibility is that Sam Raine recognizes an additional method of
showing a common-law dedication, one in which the owner’s intent to dedicate his
property to public use need not be shown unequivocally by his own acts and
9

conduct but can be presumed simply by his passive failure to respond to the
public’s open and notorious use of his property under a claim of right. The
plaintiffs, however, identify no evidence that the general public has used the
Parcel openly, notoriously and under a claim of right; on the contrary, they insist
the Parcel has at all times been for the exclusive use of Village owners and a few
select others. (Doc. 111-16 at 4-5, 7-8; Doc. 111-17 at 14-16; Doc. 111-19 at 13;
Doc. 111-21 at 9, 18-19; Doc. 112-3).
Nor is there evidence of the defendants’ passive acquiescence in any
(undemonstrated) public use, as there was in Sam Raine. A jury issue was raised
in Sam Raine based on: (1) the county’s performance of maintenance work on the
road in question; (2) the owner’s failure to pay for a public water system installed
along the road by a water and fire protection authority; (3) the owner’s failure to
ever stop anyone from freely traveling the road; and (4) the absence of any sign
declaring the road to be private. 407 So. 2d at 545. The plaintiffs identify no
evidence that anyone other than the defendants has maintained or improved the
Parcel, and it is uncontroverted that only Tannin did so. (Doc. 111-39 at 2-3). It
is further uncontroverted that the defendants fenced off both sides of the Parcel
and posted signs at both ends warning the public that the Parcel was private. The
plaintiffs make no assertion that the defendants have never affirmatively stopped
any member of the general public from using the Parcel and, without proof (which
they do not offer) that the general public routinely used the Parcel, it is difficult to
see how a failure to post guards at the Parcel or to take other extreme measures
could amount to passive acquiescence.
Finally, an estoppel under Sam Raine would require proof, not merely of
unimpeded use of the Parcel by the public at large, but a resulting increase in
surrounding property values based on the Parcel’s availability to the general
public. The plaintiffs do not even suggest that this has occurred.

10

As noted, the Court will not manufacture or support arguments on behalf of
the litigants, and the plaintiffs’ failure to support their conclusory invocation of
estoppel places no burden on the Court to supply the deficiency.
C. Scheme of Development.
According to the complaint, “when a subdivision is platted and a lot in the
subdivision is conveyed with reference to that plat, any landowner in the
subdivision has the right to enforce the scheme of development shown on the
plat.” (Doc. 1 at 15). The actual rule, as expressed by the cases on which the
plaintiffs rely, is somewhat more limited.
“It is well settled … that where a person plats land and lays off lots
according to such plat and makes sale of one or more of such lots with reference
thereto, he irrevocably dedicates the land designated thereon as streets, alleys,
avenues, and highways to the public for public uses ….” Whitten v. Ferster, 384
So. 2d 88, 88 (Ala. 1980) (emphasis added, internal quotes omitted). Once this
has occurred, “[e]very purchaser of a lot shown on the recorded map of the
subdivision has the right, as against the dedicator of the streets and the purchasers
of the other lots, to have the designated scheme of public thoroughfares
maintained in its integrity, as it existed when he purchased the property, and all
persons whosoever may use these public ways as the occasion requires.” Booth v.
Montrose Cemetery Association, 387 So. 2d 774, 777 (Ala. 1980) (emphasis
added).
This line of cases represents a particular application of the rule that an
owner’s intent to dedicate land to the general public must be unequivocally
manifested by his acts. Booth, 387 So. 2d at 777 n.1. Such an intention may be
unequivocal when the owner records a plat that “designates” areas as
“unrestricted” streets, as the plaintiffs’ cited cases reflect. Id. at 777 & n.1;
Cottage Hill Land Corp. v. City of Mobile, 443 So. 2d 1201, 1202 (Ala. 1983);
Whitten, 384 So. 2d at 88; Snead v. Tatum, 25 So. 2d 162, 162 (Ala. 1946);
11

Thetford v. Town of Cloverdale, 115 So. 165, 167 (Ala. 1927); Highland Realty
Co. v. Avondale Land Co., 56 So. 716, 718 (Ala. 1911). The recorded Plat in this
case, however, does not designate the Parcel as a street or other thoroughfare;
instead, the Parcel is labeled blandly as “beach access.” (Doc. 111-31 at 1, 3).
The plaintiffs – who devote no argument to this section but simply quote from two
cases and string cite others – do not address this inconvenient fact.
The Court is aware that an adequate designation may sometimes be shown
“without the designation eo nomine of the space as a street, highway or alley” but
“from the situation created by the relative location of blank spaces and lots or
blocks and from the purpose to which the lots or blocks are expected to be devoted
and from the lines and courses indicated by the map as they relate to lines of the
subdivisions made.” East Birmingham Realty Co. v. Birmingham Machine &
Foundry Co., 49 So. 448, 451 (Ala. 1909). While the plaintiffs included East
Birmingham Realty in their string citation, they presented no argument based on it,
or even an explanation of its relevance. (Doc. 121 at 12). The Court has and
expresses no opinion whether East Birmingham Realty would have aided the
plaintiffs had they articulated any argument drawn therefrom; as noted previously,
the Court will not construct arguments on behalf of the parties that they have
elected not to present themselves.6
II. Count Three –Easement by Prescription.
“To establish an easement by prescription, the claimant must use the
premises over which the easement is claimed for a period of twenty years or more,
adversely to the owner of the premises, under claim of right, exclusive,
continuous, and uninterrupted, with actual or presumptive knowledge of the
6

Even could the plaintiffs show a dedication under this line of cases, they would
not like the result. The plaintiffs stridently oppose any use of the Parcel by anyone but
themselves and other Village owners, yet any dedication would by law run in favor of the
public at large. E.g., Booth, 387 So. 2d at 777; Snead, 25 So. 2d at 163.

12

owner.” Bull v. Salsman, 435 So. 2d 27, 29 (Ala. 1983). As the defendants point
out, (Doc. 113 at 2), seven plaintiffs cannot satisfy the 20-year requirement.7 The
plaintiffs do not contest the point.
The parties agree that “permissively” is the antonym of “adversely,” but
they disagree who bears the burden regarding this element. The defendants quote
Bull for the proposition that “[t]he presumption is that the use is permissive, and
the claimant has the burden of proving that the use was adverse to the owner.”
435 So. 2d at 29. The plaintiffs counter with Thomas v. City of Rainsville, 502 So.
2d 346 (Ala. 1987), for the proposition that “an open, defined roadway, through
reclaimed land, in continuous use by the public as a highway without let or
hindrance for a period of twenty years becomes a public highway by prescription,”
with the burden “then on the landowner to show the user was permissive only.”
Id. at 348 (internal quotes omitted).
As the defendants point out, (Doc. 128 at 2-3), the cause of action set forth
in Count Three is expressly limited to “easement by prescription.” (Doc. 1 at 15).
Further, the relief sought is expressly limited to the establishment of an easement
by prescription in favor of the plaintiffs only. (Id. at 16). As the defendants also
point out, Thomas and the other cases on which the plaintiffs rely do not involve
easement by prescription but dedication by prescription. 502 So. 2d at 347. As
with other forms of dedication, dedication by prescription cannot run in favor of
individuals but only in favor of the public at large. Id. (“general use by the public”
for a sufficiently long and adverse period results in a “public highway by
prescription”). The Court agrees with the defendants that the plaintiffs cannot by
brief expand their complaint to encompass a claim for dedication by prescription.
E.g., Dukes v. Deaton, 852 F.3d 1035, 1046 (11th Cir. 2017) (“A plaintiff may not

7

Johnson purchased his property in 2005. The Blacks purchased their property in
2006. The Boyds purchased their property in and after 2014. The Schultes purchased
their property in 2015. (Docs. 111-6, 111-9 to -12).
13

amend her complaint through argument in a brief opposing summary judgment.”)
(internal quotes omitted).
The question remains whether the defendants have carried their threshold
burden on motion for summary judgment of showing either that the plaintiffs’ use
of the Parcel was permissive or that the plaintiffs cannot prove otherwise. The
Plat satisfies the defendants’ burden by negating adverse use: in publicly
identifying the Parcel as “beach access,” the Plat unmistakably reflects the
defendants’ permission for the plaintiffs and other Village owners to use the Parcel
for that purpose.
The plaintiffs offer no adequate response. Legally, they advance a
presumption of adverse use, (Doc. 122 at 6-8), but the Court has demonstrated the
presumption does not apply in this case. Factually, they direct the Court to “[t]he
testimony of adverse use cited above,” (id. at 8), but the deposition excerpts to
which they cite directly refute the proposition when they address it at all. (Id. at 25).8 Finally, they suggest the defendants have admitted they own no interest in the
Parcel, such that they could not give permission to use the Parcel, such that the
plaintiffs’ use of the Parcel must have been adverse. (Id. at 8). If, however, the
defendants have no interest in the Parcel, it is impossible for any plaintiff to obtain
an easement by prescription. “Without having first determined who owned the
driveway, the trial court could not have granted either party … an easement by
prescription in the driveway, because in order to establish an easement by
prescription, use of the disputed area must be adverse to the owner [and] with
knowledge of the owner.” Coleman v. Kilpatrick, 824 So. 2d 788, 791 (Ala. Civ.
App. 2001) (emphasis in original); accord Hanks v. Spann, 990 So. 2d 399, 403
(Ala. Civ. App. 2008).

8

Clarke has “always been allowed” by the defendants to use the Parcel. (Doc.
120-1 at 80). The defendants told José Rivera that he could drive his car down the Parcel
to the beach. (Id. at 114).
14

Because the defendants have met their initial burden, and because the
plaintiffs have failed to present any evidence that their use of the Parcel was
adverse to the defendants (or, as to seven plaintiffs, that they used the Parcel for
20 years), the defendants are entitled to summary judgment as to Count Three.
III. Count Five – Breach of Warranty.
Count Five alleges that Tannin “breached the warranties contained in each
Plaintiff’s deed to land within the Village of Tannin.” (Doc. 1 at 17). On brief,
the plaintiffs clarify that Count Five is based on breaches of the covenants of
warranty and of quiet enjoyment. (Doc. 124 at 2).
“The covenant for quiet enjoyment and of warranty … are practically
identical in operation; and whatever constitutes the breach of the one covenant, is
a breach of the other. Either extends to all lawful, outstanding adverse claims
upon the premises conveyed.” Prestwood v. McGowin, 29 So. 386, 388 (Ala.
1900) (internal quotes omitted). Both covenants provide “an assurance against the
consequences of a defective title, or of any disturbance in the enjoyment of the
land conveyed ….” Keel v. Ikard, 133 So. 906, 907 (Ala. 1931); accord St. Paul
Title Insurance Corp. v. Owen, 452 So. 2d 482, 485 (Ala. 1984) (covenants of
quiet enjoyment and warranty contained in deed “ran with the land purportedly
conveyed by that instrument”); Chicago, Mobile Development Co. v. G.C. Coggin
Co., 66 So. 2d 151, 158 (Ala. 1953) (both covenants are to “defend the title
conveyed”).
As shown above, the warranties on which the plaintiffs rely extend only to
the property “conveyed” by the plaintiffs’ respective deeds. As the defendants
note, (Doc. 115 at 2-3), the plaintiffs’ deeds do not purport to transfer to them any
interest in the Parcel. On the contrary, on its face each deed on which the
plaintiffs rely conveys only a particular numbered lot within the Village.9 The
plaintiffs acknowledge that the deeds convey only particular lots, (Doc. 124 at 3-4,
9

(Doc. 120-1 at 269, 273, 276, 280, 284, 288, 292, 296).
15

5), and they offer no explanation how this circumstance could not be fatal to their
claim. As discussed above, it is.
IV. Count One - ILSA.
The complaint alleges the defendants violated 15 U.S.C. § 1703(a). (Doc. 1
at 12). The plaintiffs’ brief clarifies that the claim is based on Section 1703(a)(2).
(Doc. 120 at 19-21). The defendants assert a number of arguments in opposition
to this claim, but the Court finds two dispositive.
Section 1703(a)(2) prohibits a developer or agent, “with respect to the sale
or lease, or offer to sell or lease, any lot not exempt under section 1702(a) of this
title,” from engaging in certain conduct. A cause of action for violation of Section
1703(a)(2) runs in favor only of “[a] purchaser or lessee” and only against “a
developer or agent.” 15 U.S.C. § 1709(a). A “purchaser” is defined as “an actual
or prospective purchaser or lessee of any lot in a subdivision.” Id. § 1701(10).
Cases construing these provisions have concluded that a purchaser has a cause of
action only if he or she purchased directly from the developer and not from a
previous purchaser.10 It is uncontroverted that the Blacks, the Boyds, the Schultes
and Johnson purchased their properties from third parties, not from the defendants.
(Docs. 111-6, -8 to -12).
The defendants presented this argument in their opening brief, (Doc. 111 at
18-19), and the plaintiffs offer no defense of these seven plaintiffs’ ILSA claim.
Instead, they suggest only that the Court may look to these plaintiffs’ experience
in determining whether the defendants violated ILSA with respect to the other five
plaintiffs. (Doc. 120 at 24-25). As previously noted, the Court will not advance
or support arguments the parties have declined to express themselves. Because

10

Gibbes v. Rose Hill Plantation Development Co., 794 F. Supp. 1327, 1333-34
(D.S.C. 1992); Thompson v. Bank of America, 2011 WL 13151658 at *7 (E.D.N.C.
2011); Konopisos v. Phillips, 226 S.E.2d 522, 524 (N.C. App. 1976).

16

these seven plaintiffs did not purchase lots from the defendants, the defendants are
entitled to summary judgment as to their ILSA claim.
“It shall be unlawful for any developer or agent, directly or indirectly, to
make use of any means or instruments of transportation or communication in
interstate commerce, or of the mails … with respect to the sale or lease, or offer to
sell or lease, any lot not exempt under section 1702(a) of this title … to employ
any device, scheme, or artifice to defraud [or] to obtain money or property by
means of any untrue statement [or omission] of a material fact [or] to engage in
any transaction, practice, or course of business which operates or would operate as
a fraud or deceit upon a purchaser [or] to represent that” certain amenities will be
provided or completed unless so stipulated in the contract. 15 U.S.C. § 1703(a).
The parties do not address what this unwieldy provision means, but the
defendants reasonably assume it must require at least that they used interstate
communications or transportation, or the mails, to market or promote the Village
before a specific plaintiff purchased his or her lot. (Doc. 111 at 27). The plaintiffs
express no disagreement with this proposition but instead insist there is evidence
the defendants marketed and promoted the Village by such means. (Doc. 120 at
38).
Clarke purchased his lot in March 1990. (Doc. 111-1). The Grays
purchased their lot in June 1990. (Doc. 111-2). The Riveras purchased their lot in
June 1994. (Doc. 111-3).11 The defendants offer the testimony of Gounares for
the proposition that they did not use the mails or any interstate transportation or
communications for sales or marketing purposes prior to these dates. Specifically,
Gounares states that: he mailed no promotional, marketing or other material to

11

The Riveras later purchased two additional lots, one of which they sold to the
Blacks in November 2004 and the other of which they sold to Johnson in May 2005.
(Docs. 111-5, -8, -11). Because the Riveras sold these lots over a decade before filing
this lawsuit, the defendants conclude they are not part of this lawsuit. (Doc. 111 at 3).
The plaintiffs express no disagreement with that conclusion, with which the Court
concurs.
17

Clarke, the Grays, the Riveras or any other plaintiff (such materials were available
only in the sales office); the only advertisements for the sale of lots in the Village
were placed in Alabama publications targeted to Alabama residents; and Tannin
first used a website in 2003. (Doc. 111-13 at 24-25; Doc. 111-39 at 1-2). The
defendants’ showing that they did not make use of the mails or interstate
transportation or communications prior to the Riveras’ purchase passes the burden
to the plaintiffs to show a genuine issue as to this material fact.
The plaintiffs in response identify several circumstances that they believe
satisfy the mails/interstate communications/transportation element of their claim:
(1) an April 1990 Birmingham News article and contemporaneous advertisement
therein; (2) the defendants’ use of a Florida attorney to prepare the Declaration;
(3) the subdivision’s design by an architectural firm from Florida, which firm
traveled the southeast in the course of their design work; (4) the defendants’
passing out of brochures to visitors to the sales office; (5) mention of the
development in several magazines; and (6) Tannin’s 1987 mailing to the IRS of an
application for an employer identification number. (Doc. 120 at 36-38).
The second, third and sixth items on the plaintiffs’ list do not concern
marketing and promotion of the Village (as they concede is required) but only its
development. The fourth item involves only the hand-to-hand distribution of
promotional material at a specific Alabama location. (Doc. 120-1 at 29).
Something clearly was published in the listed periodicals, (Doc. 120-1 at
213-16, 218-21), but the plaintiffs offer no evidence that it constituted marketing
or promotional material. The published material clearly is not advertisement but
rather articles discussing the Village (and perhaps other developments) using what
appears to be – from the few isolated sentences and sentence fragments the
plaintiffs offer – favorable language. The defendants no doubt were pleased by
such publicity, but the plaintiffs do not explain how the articles could constitute
marketing or promotional material any more than would a restaurant review in
Bon Apétit. Nor do the plaintiffs explain how a third party’s publication of a
18

favorable article could constitute the defendants’ “use” of the mails or interstate
communication. The situation might be different if the defendants wrote the
articles or paid the publications to write and publish them, but the plaintiffs do not
even suggest that this occurred, much less produce evidence of such a history. As
previously noted, the Court will not devise or develop arguments the parties have
declined to assert themselves.
The Birmingham News article, (Doc. 120-1 at 45-46), does not assist the
plaintiffs for the same reasons the magazines discussed in the previous paragraph
do not assist them.12 Though informative and generally favorable, the article does
not constitute an advertisement, and the plaintiffs offer no evidence that the article
was written, or paid for, by the defendants.13
The Birmingham News advertisement, (Doc. 20-1 at 230), plainly
constitutes marketing or promotional material, for the publication of which the
defendants presumably paid. However, and as the defendants note, (Doc. 126 at
15), the plaintiffs offer no evidence that this edition (or any other) of the
Birmingham News was mailed or traveled in interstate commerce. Nor do the
plaintiffs ask the Court to take judicial notice of such mailing or travel. Instead,
they simply assume the newspaper “would have” used the mails, (Doc. 120 at 37),
but without evidence this is mere speculation, not reasonable inference. See, e.g.,
Marshall v. City of Cape Coral, 797 F.2d 1555, 1559 (11th Cir. 1986)
(“[I]nferences based upon speculation are not reasonable.”).
Because the plaintiffs have failed to show the existence of a genuine issue
of fact as to whether the defendants made use of the mails, or of interstate
communications or transportation, to market, promote or sell lots in the Village

12

Because the Birmingham News article does not assist the plaintiffs, the
defendants’ motion to strike the article, (Doc. 131), is denied as moot.
13

The article includes no by-line, but neither does an article on the same page
addressing Florida’s official state saltwater fishing rules.
19

prior to June 1994, the defendants are entitled to summary judgment as to the
ILSA claim of Clarke, the Grays and the Riveras.
V. Count Four - Fraud.
Count Four alleges that the defendants misrepresented to each Plaintiff that
lots within Tannin had “deeded access” to the Gulf. (Doc. 1 at 16). In brief, the
plaintiffs repeat that the defendants misrepresented that lots in the Village were
conveyed with “deeded or vested rights of access.” (Doc. 120 at 19).14 The
defendants raise several arguments in support of their motion for summary
judgment, most asserted against varying subsets of the twelve plaintiffs.
A. Statute of Frauds.
The defendants’ only universal argument is that the plaintiffs’ fraud claims
are barred by Alabama’s statute of frauds. (Doc. 114 at 5-7).
In the following cases, every agreement is void unless
such agreement or some note or memorandum thereof expressing
the consideration is in writing and subscribed by the party to be
charged therewith or some other person by him thereunto lawfully
authorized in writing:
…
Every contract for the sale of lands, tenements or hereditaments,
or of any interest therein, … unless the purchase money, or a portion
thereof is paid and the purchaser is put in possession of the land by
the seller.
Ala. Code § 8-9-2(5).
The plaintiffs do not claim a fee interest in the Parcel but rather a vested
right to use the Parcel to access the beach. The Court agrees with the defendants,
(Doc. 129 at 12), that the right the plaintiffs describe corresponds with an
easement. An easement is an interest in land and thus subject to the statute of
14

Neither side suggests that “vested” is a broader term than “deeded,” so the
Court employs the former term even though it is not used in the complaint.

20

frauds. Garrison v. Alabama Power Co., 807 So. 2d 567, 572 (Ala. Civ. App.
2001).
The plaintiffs argue that the statute of frauds does not apply because their
“fraud claims are not dependent on any contract with the Defendants.” (Doc. 123
at 9). As the defendants note, however, “an oral promise that is void by operation
of the Statute of Frauds will not support an action against the promisor for
promissory fraud.” Bruce v. Cole, 854 So. 2d 47, 58 (Ala. 2003). The plaintiffs
do not deny that their fraud claim depends on oral promises by the defendants that
they would have vested beach access via the Parcel; on the contrary, they
repeatedly insist that the claim is based on such promises.15 Their claim is thus
subject to the statute of frauds.
The parties disagree as to whether a writing adequate to satisfy the statute
of frauds exists. The Court need not resolve that dispute, because the defendants
have not carried their threshold burden on motion for summary judgment of
showing that the plaintiffs were not “put in possession” of the Parcel so as to
obviate compliance with the statute of frauds.16 The defendants concede – indeed,
they insist – that the plaintiffs at all times from purchase until July 2015 were able
to, and did, freely use the entirety of the Parcel for beach access. (Doc. 111 at 1).
The defendants posit that such use does not qualify as being put in possession,
(Doc. 129 at 13), but they offer no authority or analysis in support of this less than
obvious proposition. Since an easement to cross another’s property can by its
nature be exercised only at times and not continuously, it is not clear what more
could be required to satisfy the “put in possession” provision. To the uncertain
extent the defendants’ argument is that the plaintiffs’ use of the Parcel was merely
15

“At the time each Plaintiff bought his or her lot within the Village of Tannin,
the Tannin Defendants promised that all property would have deeded access to the Gulf
of Mexico” via the Parcel. (Doc. 1 at 5; accord Doc. 120 at 2, 19; Doc. 123 at 10).
16

“[B]ecause the Statute of Frauds is an affirmative defense, …, the defendant
invoking it bears the burden of proving that the contract meets the stated criteria of the
statute.” Ex parte Ramsay, 829 So. 2d 146, 154 (Ala. 2002).
21

permissive, they have not attempted to show that whether a plaintiff is put in
possession depends on the defendant’s intent rather than on the parties’ actions.
B. Statute of Limitations.
“A fraud action is subject to a two-year statute of limitations.” Liberty
National Life Insurance Co. v. McAllister, 675 So. 2d 1292, 1297 (Ala. 1995)
(citing Ala. Code § 6-2-38). “However, the fraud claim accrues only when the
plaintiff discovers the fraud or when the plaintiff, acting as a reasonable person,
should have discovered the fraud.” Id. (citing Ala. Code § 6-2-3).
All plaintiffs save the Schultes closed more than two years before this
action was filed. The defendants argue that these plaintiffs discovered the alleged
fraud, or reasonably should have discovered it, contemporaneously with the
recording of their deeds, such that the limitations period as to them expired before
suit was filed. Under Alabama law, the recording of a deed provides conclusive
notice to the world of “everything that appears from the face of the instrument,”
and the deeds, they say, provided “constructive notice of the ownership” of the
Parcel, such that these plaintiffs knew or should have known “the status of title” to
the Parcel. (Doc. 114 at 5).
The defendants do not explain this assertion. In particular, they do not
explain what it is about the deeds that reflects they held title to the Parcel. The
deeds simply state that the grantors convey specified lots to the grantees. They do
not mention the Parcel, much less identify the defendants as holding title to the
Parcel; because nothing regarding such ownership “appears from the face of the
instrument,” the defendants’ argument collapses.
The Court further agrees with the plaintiffs, (Doc. 123 at 8), that the
defendants’ argument would fail even if the deeds explicitly stated that the
defendants held title to the Parcel. The plaintiffs’ claim is that they were told they
would have vested beach access via the Parcel. The very nature of an easement is
that the owner of property grants to a non-owner certain rights of access to and/or
22

through his property; there is simply nothing inconsistent between title resting in
the defendants and access rights resting in the plaintiffs.17
In the same vein, the defendants argue that Clarke, the Grays and the
Riveras claim the defendants misrepresented that the Association owned the Parcel
and that, once these plaintiffs discovered the Association did not own the Parcel,
they were, or should have been, aware of the fraud such that the limitations period
began to run. (Doc. 111 at 22-23; Doc. 114 at 2-3). The analysis, however, is a
bit more complicated.
The defendants do not cite any evidence for the proposition that Clarke was
told, or believed, that the Association owned the Parcel; the representations to
which they cite are that he would have “deeded access,” not that the Association
owned the Parcel. In any event, the defendants identify no evidence that Clarke
understood, or should have understood, that he could not have deeded access
unless the Association owned the Parcel. As discussed above, there is nothing
inconsistent between Tannin owning the Parcel and the plaintiffs having vested
access rights carved out from that ownership.
In the testimony on which the defendants rely, José Rivera stated he was
shown the Parcel and told, “it belongs to the subdivision.” He concluded from this
that it was “[m]ore likely” that the Association owned it. By 2005, he understood
that either the Association or Tannin owned the Parcel, but he assumed that
Tannin meant the Association. (Doc. 111-19 at 3-4,10). This testimony shows
that Rivera did not consider the Association’s ownership of the Parcel to be an
essential predicate to his beach access rights. It shows further that Rivera did not
see any difference in ownership by Tannin and ownership by the Association.
The Grays’ situation is similar. Michael Gray was told he would receive
deeded beach access, which he understood to mean the Association owned “it.”
17

Although unnecessary to the result, Clarke voiced exactly this understanding.
(Doc. 111-16 at 41).

23

(He did not clarify whether “it” referred to the Parcel or the access rights.) He
later heard at an annual meeting that Tannin owned the Parcel, with Gounares
responding that this was just an oversight and that the residents actually owned the
total area. (Doc. 111-17 at 6-7, 9). Michael, like José, did not perceive a
significant difference between Tannin and the Association. (Doc 120-1 at 98).
It might or might not be possible to construct and support a viable
limitations argument from the threads the defendants offer. It might, for example,
be possible to show that any reasonable person would know, or be charged with
knowledge, that Tannin and the Association were different entities with mutually
exclusive rights and interests. It might also be possible to show that the plaintiffs,
or some of them, understood or should have understood (even though it is a false
proposition) that they could have no vested beach access unless the Association
owned fee title to the Parcel. The Court neither has nor expresses any opinion on
that score; for present purposes, it is enough to conclude that the defendants by
their cursory treatment have not met their burden on motion for summary
judgment of establishing the factual and legal points necessary to support their
limitations defense.
With respect to Clarke only, the defendants raise three additional arguments
regarding the statute of limitations. They first argue Clarke should have
discovered in 1990 that he had no deeded beach access, because the deed to his lot
contained no reference to the Parcel. (Doc. 111 at 23). Clarke testified that, as a
layman, he took “deeded access” to mean “we had a deed somewhere to the
access,” (Doc. 111-16 at 6 (emphasis added)), and the defendants have not shown
that belief to be unreasonable. The deed to the lot would be one “somewhere” a
deed to beach access could reside, but it is not the only one, and property interests
short of fee title are routinely transferred by documents other than deeds
conveying title.
Second, the defendants argue Clarke should have discovered he had no
deeded beach access in 1991. (Doc. 111 at 22). Based on certain encounters,
24

Clarke had grown distrustful of Gounares and so reviewed his deed; finding no
reference to deeded beach access there, Clarke went to the county courthouse,
where an employee clerk helped him locate the recorded documents and told him
they showed he did have deeded beach access. The episode put Clarke’s mind at
ease for many years. (Doc. 111-16 at 11-14, 23-24, 43). The defendants find it
outrageous that a layman would rely on a courthouse employee’s assurance – after
reviewing the recorded documents – that he had deeded beach access, but their
indignation is no substitute for legal authority or cogent explanation why a
“reasonable person should have discovered the fraud” in 1991 despite such
apparently informed assurances. Simply labeling the employee’s error a
“misrepresentation” – which is all the defendants offer – is no explanation at all.
Finally, the defendants note that Clarke thought “deeded access” denoted
exclusive access for Tannin owners and that, in the early 1990’s, he spoke with a
man whose family had used the Parcel for two generations and was near tears
because Gounares was suing him to stop the practice and was putting up a new
fence to deny him and others access to the Parcel. Because Clarke knew from this
conversation that the beach access was not used exclusively by Tannin owners, the
defendants conclude the limitations period began to run at that time. (Doc. 111 at
22-23; Doc. 111-16 at 4-6, 17). The plaintiffs, however, are not suing the
defendants for misrepresenting that no one else would use the Parcel but for
misrepresenting that they had vested access to the Parcel; discovering the former
misrepresentation could not start a limitations period as to the latter, undiscovered
misrepresentation.18
C. No Misrepresentation.
A fraud claim requires a false representation. E.g., Waddell & Reed, Inc. v.
18

Nor does it seem possible that Clarke’s awareness that a single individual had
used the Parcel but that the defendants were physically and legally preventing him (and
other outsiders) from doing so could start the limitations period even with respect to the
former representation.
25

United Investors Life Insurance Co., 875 So. 2d 1143, 1160 (Ala. 2003). The
defendants challenge the ability of several plaintiffs to satisfy this element of their
claim.
Johnson purchased his lot from the Riveras, not from the defendants. He
acknowledges that the only representations he received regarding beach access
were from the Riveras, not from the defendants. (Doc. 120 at 11). The defendants
conclude that Johnson cannot establish that they made any representation to him.
(Doc. 111 at 13-14, 26; Doc. 114 at 3). The plaintiffs agree that Johnson had no
contact with the defendants or their representatives before purchasing his lot and
that the “material portions of [his] individual beliefs and experiences” were
conversations with Rivera, from which he developed the understanding he had
deeded vehicular beach access. (Doc. 120 at 7, 11).
The plaintiffs do not argue that Rivera’s representations can be attributed to
the defendants.19 Instead, they argue that the defendants made “global
misrepresentations” by recording the Plat and by advertising on their website that
Middle Gate was a private road extending to the Gulf. (Id. at 36; Doc. 123 at 7).
By the plaintiffs’ own admission, however, Johnson never reviewed the Plat or the
website before purchasing his lot, so he could not have received any
representations contained therein. See Eady v. Southern States Ford, Inc., 548 So.
2d 180, 181-82 (Ala. Civ. App. 1988) (where the plaintiff conceded she did not
see the sticker price, “there was no representation made by the sticker on which
she could have relied”) (emphasis in original).20 Johnson’s fraud claim therefore
must fail.
19

See generally Delta Health Group, Inc. v. Stafford, 887 So. 2d 887, 899 (Ala.
2004) (“[I]n certain limited circumstances … a plaintiff may properly state a fraud claim
even though the defendant makes a false representation to a third party rather than to the
plaintiff.”).
20

The plaintiffs note that, by statute, recording the Plat provided conclusive
notice to all the world of everything appearing on its face. (Doc. 123 at 7). The single
case on which they rely, however, says only that such notice can provide notice that a
26

Like Johnson, the Blacks purchased their lot from the Riveras, and the
defendants argue that they made no representations to the Blacks before their
purchase. (Doc. 114 at 3). The Blacks, however, unlike Johnson, reviewed the
website before purchasing. There they read the Declaration, which states that
“Tannin is near the Gulf of Mexico and has access to it.” There they also saw an
aerial shot of the area with the boundaries of the property highlighted, including
the Parcel. (Doc. 111-30 at 5; Doc. 111-40; Doc. 120-1 at 131, 134-35).
The defendants argue that nothing in these documents represented either
that the Parcel was owned by the purchasers or by the Association or that the
Parcel would have vehicular access. (Doc. 114 at 4). As has been previously
discussed, the question is not who owned fee title to the Parcel but the nature of
the access rights that purchasers reasonably believed they acquired. It would
appear that the Blacks could reasonably understand from the Declaration and the
web photo that they were acquiring permanent beach access across the width of
the Parcel; the defendants’ failure to engage that proposition obviates further
discussion.
The defendants assert that the only representation made to the Boyds was
the correct statement that Tannin owned the Parcel. (Doc. 114 at 4). According to
Austin Boyd’s testimony, however, Gounares also told him, incorrectly, that the
beach access was “part of the association,” which made the decisions on whether
to insure the Parcel. (Doc. 120-1 at 50-52).
The defendants assert that the only representation made to the Schultes was
the location of the Parcel and the existence of deeded beach access. They say
these representations were true because Gounares accurately identified the Parcel
on the Plat and because the Grant had already been recorded. (Doc. 114 at 4).
According to Gary Schulte’s testimony, he talked to Gounares in the land office
conflicting representation is false; it in nowise suggests that a plaintiff can base a fraud
claim on a representation of which he was ignorant.

27

and asked him where the deeded access was; Gounares brought Schulte over to the
Plat and showed him the 41-foot-wide Parcel; he did not indicate that the deeded
beach access extended only to a five-foot strip of the Parcel. (Doc. 111-26 at 710). The defendants do not explain how Gounares’ general reference to the Parcel
could not reasonably be construed as a representation that the deeded beach access
encompassed the entire Parcel.
D. No Reliance.
A fraud claim requires reasonable reliance on the misrepresentation. E.g.,
Waddell & Reed, 875 So. 2d at 1160. The defendants challenge most of the
plaintiffs’ ability to satisfy this element of their claim.
The purchase agreements executed by Clarke, the Grays and the Riveras
included a merger clause reading as follows:
Entire Agreement; No Representations. This Agreement sets
forth the entire agreement between the parties, and may not be
amended or modified except by written agreement of the parties.
Buyer acknowledges that he has not relied on any representations,
warranties, statements or estimates of any nature whatsoever,
whether written or oral, made by Seller, the selling agent, or
otherwise, except as specifically represented in this Agreement.
(Doc. 111-34 at 4; Doc. 111-37 at 4; Doc. 111-38 at 4). The defendants argue that
these plaintiffs thereby disclaimed reliance on any misrepresentation and that such
a disclaimer negates reasonable reliance as a matter of law. (Doc. 111 at 24; Doc.
114 at 3). For this proposition, the defendants rely exclusively on two Florida
cases decided in the ILSA context; they offer no authority for the proposition that
Alabama considers such a disclaimer necessarily to defeat a fraud claim. The
disconnect is fatal to their argument.21
21

The Court notes the existence of Alabama precedent that “[a]n integration
clause … is also not applicable to exclude evidence relating to a fraud claim” and that
this rule extends to clauses disclaiming reliance on any representations. Environmental
Systems, Inc. v. Rexham Corp., 624 So. 2d 1379, 1383, 1384-85 (Ala. 1993).

28

The Boyds and the Schultes purchased their lots after the defendants
erected the locked gate in July 2015. From this, the defendants conclude that these
plaintiffs could not reasonably have relied on any representation that they would
have access to the entire Parcel. (Doc. 114 at 7). The plaintiffs respond that the
mere existence of the gate cannot exclude reasonable reliance; instead, the
defendants must show that the Boyds and the Schultes were aware of the gate’s
existence before they closed, and they must also show that a reasonable person
with such awareness would have realized he was not acquiring access to the entire
Parcel. (Doc. 123 at 11-12).
The Court agrees with the plaintiffs. The defendants have pointed to no
evidence that the Boyds or Schultes were aware of the gate when they closed, and
it is difficult to see how their reasonable reliance could be destroyed by
information they did not possess. Even if these plaintiffs were aware of the gate,
that is not the same thing as being aware of its significance. The gate could have
been erected, for example, to keep out non-Village users, with owners being
provided keys, combination or other means of opening the gate when and as they
desired; hunting camps and other jointly used properties commonly employ such a
practice. Certainly the defendants have articulated no basis for concluding that
such an understanding of the gate’s significance would be unreasonable as a
matter of law.22
The defendants protest that the burden lies with these plaintiffs to produce
evidence of when they became aware of the gate and of what significance they
attached to it, (Doc. 129 at 14), but that is not how summary judgment works. It is
the defendants’ initial burden to point to materials in the file either negating
reasonable reliance or showing (as by discovery admissions) that the plaintiffs will

22

Their only rationale is that, once the gate was erected, “it was obvious that no
… vehicular access was possible due to the gate.” (Doc. 114 at 7). As stated in text, that
conclusion is far from obvious and must compete with other reasonable inferences.
29

be unable to present evidence establishing such reliance. The defendants have not
carried that burden and thus have passed no burden to the plaintiffs.
VI. Breach of Fiduciary Duty.
Gounares presents a number of arguments in support of his motion for
summary judgment. Only the first is pressed against all twelve plaintiffs.
A. Failure to Allege Damages.
An element of a claim for breach of fiduciary duty is “damages suffered as
a result of the breach.” Regions Bank v. Lowrey, 101 So. 3d 210, 219 (Ala. 2012).
Gounares assert without amplification that Count Six fails to allege that any
breach of fiduciary duty caused damage to the plaintiffs. (Doc. 116-1 at 26).
“At a minimum, notice pleading requires that a complaint contain
inferential allegations from which we can identify each of the material elements
necessary to s sustain a recovery under some viable legal theory.” Wilchombe v.
TeeVee Toons, Inc., 555 F.3d 949, 960 (11th Cir. 2009) (emphasis and internal
quotes omitted). Count Six does not expressly allege that the plaintiffs suffered
damages as a result of Gounares’ breach of fiduciary duty, but it does allege that
he breached his fiduciary duty, and it demands recovery of compensatory and
punitive damages. (Doc. 1 at 17). Gounares fails to explain why this does not
constitute at least an inferential allegation that Gounares’s breach of fiduciary duty
caused damage to the plaintiffs. Moreover, Count Six adopts and incorporates all
preceding allegations. (Doc. 1 at 17). Count One expressly alleges that the
defendants’ conduct – which includes the conduct on which Count Six is based –
caused the plaintiffs to suffer damages, including diminished property values, lost
or diminished rental proceeds, and loss of use and enjoyment of their land. (Id. at
14).
The plaintiffs pointed all this out in their brief, (Doc. 125 at 6-7), and
Gounares in his reply offers no response. Instead, he changes his argument from
30

one attacking the pleading of damages to one challenging the plaintiffs’ evidence
of damages. (Doc. 132 at 15). This will not do. District courts, including this
one, ordinarily do not consider arguments raised for the first time on reply. E.g.,
Arnold v. State Farm Fire and Casualty Co., 268 F. Supp. 3d 1297, 1303 (S.D.
Ala. 2017). Gounares identifies no justification for withholding this argument
until his reply brief, and the Court perceives none. The Court therefore will not
consider his untimely argument.
B. Lack of Fiduciary Relationship.
An element of the plaintiffs’ claim is “the existence of a fiduciary duty
between the parties.” Lowrey, 101 So. 3d at 219. The existence of a fiduciary
duty, in turn, depends on the existence of a fiduciary relationship. Gounares
argues there can be no fiduciary relationship between himself and the Blacks,
Boyds, Schultes and Johnson because those plaintiffs did not purchase lots directly
from Tannin but from previous purchasers of those lots. (Doc. 116-1 at 22-24).
The plaintiffs respond that Gounares’s fiduciary relationship springs from
his connection with the Association and with Tannin. (Doc. 125 at 2-3). The
Court shares Gounares’s skepticism that his relation to Tannin could create a
fiduciary relationship with the plaintiffs. Their own authority indicates that a
director’s fiduciary relationship extends only to the corporation and its
shareholders, and the plaintiffs are not shareholders in Tannin.
The situation is different with respect to Gounares’s relationship to the
Association. The plaintiffs cite the Restatement (Third) of Property for the
proposition that the directors and officers of a community association should be
held to high standards approximating those imposed on corporate directors and
private trustees (both of which are subject to fiduciary duties under Alabama law).
(Doc. 125 at 2-3). Gounares in his reply fails to challenge this proposition, so the
Court accepts for present purposes that Gounares’s participation in the Association
as a director or officer would support the existence of a fiduciary relationship.
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The question thus becomes whether Gounares has met his initial burden on
motion for summary judgment of showing, by reference to materials on file, either
that he was not a director or officer of the Association at the relevant time or that
the plaintiffs cannot present evidence at trial to prove that he was. Gounares
plainly has not met this burden.
According to the defendants’ evidence, Gounares was a member of the
original board of directors of the Association and was its first president. (Doc.
111-30 at 34-35). In response to the plaintiffs’ argument regarding the source of
his fiduciary duty, Gounares filed an affidavit in which he testifies that he has not
been president of the Association since May 1994. (Doc. 126-1). The affidavit
negates Gounares’s presidency after that date; due to its limited scope, however, it
does not negate his holding of some other office, or his continued position as a
director, after that date. Nor has Gounares pointed to anything in the file
demonstrating that the plaintiffs will be unable to offer at trial any evidence
regarding his post-1994 service as a director or officer of the Association.
Gounares in his reply brief asserts that the burden is on the plaintiffs to
present evidence of a fiduciary relationship, not on him to accomplish the
opposite. Because the plaintiffs have not presented evidence regarding his role
relative to the Association since May 1994, he claims victory. (Doc. 132 at 11).
As discussed above, Gounares misunderstands his burden on motion for summary
judgment; while the plaintiffs cannot advance to a jury if at trial they do not
present evidence supporting the existence of a fiduciary relationship, on motion
for summary judgment the plaintiffs bear no burden at all until and unless
Gounares first carries his threshold burden. As discussed above, he has not done
so.23

23

The Court further notes that Gounares in his reply brief improperly, and
ineffectually, purports to expand his argument to encompass all the plaintiffs. (Doc. 132
at 9-11).
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C. Lack of Standing.
Gounares presents evidence that Johnson has been in arrears for several
years in payment of his Association dues. Gounares asserts that, as a result,
Johnson’s “right to use the beach access has been suspended” and concludes that
Johnson thus lacks standing to pursue his claim against Gounares. (Doc. 116-1 at
24).
For the proposition that Johnson’s right to use the Parcel has been
suspended, Gounares cites the Declaration. That document provides only that the
Association “shall have the right to … suspend the … right to use of the
Commons by an Owner for any period during which any Assessment against his
Lot remains unpaid.” (Doc. 111-30 at 21 (emphasis added)). Gounares has thus
presented evidence that Johnson is subject to suspension, but he has presented no
evidence that Johnson has in fact been suspended. Without such evidence, his
argument necessarily fails.
D. Lack of Breach.
Gounares next argues that Clarke and the Grays have no evidence that he
breached any fiduciary duty owed them. (Doc. 116-1 at 24-25). He bases this
argument on the misapprehension that the plaintiffs’ claim rests solely on
representations made to them before closing on their respective lots. According to
the plaintiffs, however, their claim is also based, inter alia, on Gounares’s
repeated statements to the Association that Tannin’s record ownership of the
Parcel was just an oversight that he would correct. (Doc. 125 at 4). In his reply,
Gounares asserts that this and all aspects of the claim are barred by the statute of
limitations. (Doc. 132 at 12-13). Once again, the Court will not consider a new
argument raised for the first time in reply.24

24

Gounares does not claim to have been justifiably ignorant of the basis of the
plaintiffs’ claim and thus unable to properly prepare his motion for summary judgment,
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E. Lack of Lot Ownership.
Count Six alleges that Gounares owes fiduciary duties “to all lot owners” in
the Village. (Doc. 1 at 17). The Riveras and the Blacks sold their last lots in
2017. Gounares concludes that these plaintiffs are no longer “lot owners” and thus
no longer persons to whom Gounares owes any fiduciary duty. (Doc. 116-1 at 2526).
The Court agrees with the plaintiffs, (Doc. 120 at 5-6), that this argument
holds no water. The Riveras and Blacks were lot owners when the conduct made
the basis of the claim occurred, and they were still lot owners when this lawsuit
was filed. The mere fact that they subsequently sold their lots does not defeat their
claim any more than a motorist’s sale of his car would defeat his claim for injuries
suffered in an accident.
F. Lack of Damages.
Gounares presents evidence that the Blacks pursue their claim only with
respect to the lot they purchased after the locked gate was installed in July 2015.
Gounares assumes rather than demonstrates that the Blacks (for reasons he does
not articulate) cannot succeed on such a claim. (Doc. 116-1 at 26-27). The Court
will not search on Gounares’s behalf for a rationale to support his bald conclusion.

and the copious references in the record to his statements at Association meetings, and to
his other alleged representations, would render any such claim untenable.
For the same reason, the Court will not consider Gounares’s tardy injection of a
“business judgment” defense in his reply brief. (Doc. 132 at 14-15). The Court similarly
disapproves of Gounares’s effort in his reply brief to expand his no-breach argument to
encompass all twelve plaintiffs.

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CONCLUSION
For the reasons set forth above, the defendants’ motions for summary
judgment as to Counts One, Two, Three and Five are granted. Their motions for
summary judgment as to Count Four are granted with respect to Johnson and are
otherwise denied. Gounares’s motion for summary judgment as to Count Six is
denied.
DONE and ORDERED this 14th day of March, 2018.
s/ WILLIAM H. STEELE
UNITED STATES DISTRICT JUDGE

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