Standing & Enforceability of Contracts - the Gardens at Glenlakes Property Owners Assn., INC. v. Baldwin County Sewer Service, LLC


The Gardens at Glenlakes Property Owners Assn., Inc. v. Baldwin County Sewer Service, LLC, [Ms. 1150563, Sept. 23, 2016] __ So. 3d __ (Ala. 2016). In this plurality opinion (Main, J., Bolin, Shaw, and Bryan, JJ., concurring; Murdock, J., concurring in the result), the Supreme Court reverses a judgment of the Baldwin Circuit Court and remands the cause for further consideration to determine the enforceability of an agreement among property owners associations and a local sewer service provider.

The Court first rejects the Baldwin Circuit Court's reasoning for entering summary judgment in favor of the sewer service and denying summary judgments for the homeowners associations to the effect that the associations lacked standing to enforce the agreement. The Court rejected the sewer service's assertion of a lack of standing with a scholarly recitation of the law of standing:

The concept of standing implicates a court's subject matter jurisdiction. See State v. Property at 2018 Rainbow Drive, 740 So. 2d 1025, 1028 (Ala. 1999) ("When a party without standing purports to commence an action, the trial court acquires no subject-matter jurisdiction."). As Justice Lyons wrote in Hamm v. Norfolk Southern Ry., 52 So. 3d 484, 499 (Ala. 2010) (Lyons, J., concurring specially): "Imprecision in labeling a party's inability to proceed as a standing problem unnecessarily expands the universe of cases lacking in subject-matter jurisdiction." In Wyeth, Inc. v. Blue Cross & Blue Shield of Alabama, 42 So. 3d 1216 (Ala. 2010), this Court noted:

"[O]ur courts too often have fallen into the trap of treating as an issue of 'standing' that which is merely a failure to state a cognizable cause of action or legal theory, or a failure to satisfy the injury element of a cause of action. As the authors of Federal Practice and Procedure explain:

"'The question whether the law recognizes the cause of action stated by a plaintiff is frequently transformed into inappropriate standing terms. The [United States] Supreme Court has stated succinctly that the cause-of-action question is not a question of standing.'

"13A Charles Alan Wright, Arthur K. Miller, and Edward H. Cooper, Federal Practice & Procedure § 3531 (2008) (noting, however, that the United States Supreme Court, itself, has on occasion 'succumbed to the temptation to mingle these questions'). The authors go on to explain:

"'Standing goes to the existence of sufficient adversariness to satisfy both Article III case-or-controversy requirements and prudential concerns. In determining standing, the nature of the injury asserted is relevant to determine the existence of the required personal stake and concrete adverseness. ...'

"13A Federal Practice & Procedure § 3531.6 .... Cf. 13B Federal Practice & Procedure § 3531.10 (discussing citizen and taxpayer standing and explaining that 'a plaintiff cannot rest on a showing that a statute is invalid, but must show "some direct injury as a result of its enforcement, and not merely that he suffers in some indefinite way in common with people generally"').

"In the present case, Wyeth appears to argue that the plaintiff, BCBSAL, lacks standing because, Wyeth says, BCBSAL's allegations, even if true, would not entitle it to a recovery. ...

"... The question whether the right asserted by BCBSAL is an enforceable one in the first place, i.e., whether BCBSAL has seized upon a legal theory our law accepts, is a cause-of-action issue, not a standing issue.


"Nor do we see that the consideration of the legal theory asserted by BCBSAL is outside the subject-matter jurisdiction of either the trial court or this Court. The courts of this State exist for the very purpose of performing such tasks as sorting out what constitutes a cognizable cause of action, what are the elements of a cause of action, and whether the allegations of a given complaint meet those elements. Such tasks lie at the core of the judicial function. See generally, e.g., Art. VI, § 139(a), Ala. Const. 1901 (vesting 'the judicial power of the state' in this Court and lower courts of the State); Art. VI, § 142, Ala. Const. 1901 (providing that the circuit courts of this State 'shall exercise general jurisdiction in all cases except as may otherwise be provided by law'). ... The issue Wyeth seeks to frame for this Court as one of 'standing' is, in reality, an issue as to the cognizability of the legal theory asserted by BCBSAL, not of BCBSAL's standing to assert that theory or the subject-matter jurisdiction of this Court to consider it."

42 So. 3d at 1219-21 (some emphasis added; some emphasis omitted).

Recently, in Ex parte BAC Home Loans Servicing, LP, 159 So. 3d 31 (Ala. 2013), this Court again examined the concept of standing and cautioned that the concept is generally relevant only in public-law cases. 159 So. 3d at 44-45. In BAC we quoted Professor Hoffman:

"'[T]he word "standing" unnecessarily invoked in the proposition can be erroneously equated with "real party in interest" or "failure to state a claim." This simple, though doctrinally unjustified, extension could swallow up Rule 12(b)(6), Rule 17[, Ala. R. Civ. P.,] and the whole law of amendments.'"

159 So. 3d at 46 (quoting Hoffman, The Malignant Mystique of "Standing," 73 Ala. Law. 360, 362 (2012)).

Ms. *10-13. The Court concludes that the true issue before the Baldwin Circuit Court was not that of standing, but whether the homeowners associations were properly real parties in interest, an issue to be determined in conformance with Rule 17(a), Ala. R. Civ. P. and its corresponding case law, including State v. Property at 2018 Rainbow Drive, 740 So. 2d 1025 (Ala. 1999). Ms. *13.

Next, the Court rejects the Baldwin Circuit Court's reasoning that the terms of the agreement were so insufficiently described and indefinite as to render the agreement unenforceable. Again, the Court provided a scholarly synopsis of the requirements for enforceability of contracts under Alabama law:

"'To be enforceable, the [essential] terms of a contract must be sufficiently definite and certain, Brooks v. Hackney, 329 N.C. 166, 170, 404 S.E.2d 854, 857 (1991), and a contract that "'leav[es] material portions open for future agreement is nugatory and void for indefiniteness'" ....' Miller v. Rose, 138 N.C. App. 582, 587-88, 532 S.E.2d 228, 232 (2000) (quoting MCB Ltd. v. McGowan, 86 N.C. App. 607, 609, 359 S.E.2d 50, 51 (1987), quoting in turn Boyce v. McMahan, 285 N.C. 730, 734, 208 S.E.2d 692, 695 (1974)). 'A lack of definiteness in an agreement may concern the time of performance, the price to be paid, work to be done, property to be transferred, or miscellaneous stipulations in the agreement.' 1 Richard A. Lord, Williston on Contracts § 4:21, at 644 (4th ed. 2007). 'In particular, a reservation in either party of a future unbridled right to determine the nature of the performance ... has often caused a promise to be too indefinite for enforcement.' Id. at 644-48 (emphasis added). See also Smith v. Chickamauga Cedar Co., 263 Ala. 245, 248-49, 82 So. 2d 200, 202 (1955) ('"A reservation to either party to a contract of an unlimited right to determine the nature and extent of his performance, renders his obligation too indefinite for legal enforcement."') (quoting 12 Am. Jur. Contracts § 66). Cf. Beraha v. Baxter Health Care Corp., 956 F.2d 1436, 1440 (7th Cir. 1992) (an indefinite term may 'render[] a contract void for lack of mutuality' of obligation).

"'Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain.' 17A Am. Jur. 2d Contracts § 183 (2004). 'The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.' Id. (emphasis added). See also Smith, 263 Ala. at 249, 82 So. 2d at 203."

White Sands Group, L.L.C. v. PRS II, LLC, 998 So. 2d 1042, 1051 (Ala. 2008).

"Generally speaking, our courts have not favored the destruction of contracts on the grounds that they are ambiguous, uncertain, or incomplete, see Alabama National Life Insurance Co. v. National Union Life Insurance Co., 275 Ala. 28, 151 So. 2d 762 (1963); Smith v. Chickamauga Cedar Co., 263 Ala. 245, 82 So. 2d 200 (1955), and 'will, if feasible, so construe a contract as to carry into effect the reasonable intention of the [contracting] parties if that can be ascertained.' McIntyre Lumber & Export Co. v. Jackson Lumber Co., 165 Ala. 268, 51 So. 767 (1910). Nevertheless, a trial court should not attempt to enforce a contract whose terms are so indefinite, uncertain, and incomplete that the reasonable intentions of the contracting parties cannot be fairly and reasonably distilled from them. Alabama National Life Insurance Co. v. National Union Life Insurance Co., supra ...."

Cook v. Brown, 393 So. 2d 1016, 1018 (Ala. Civ. App. 1981).

Ms. *15-16. Relying upon these principles, the Court concludes the contract sufficiently described the geographic scope of the parcels intended to be encompassed by the agreement and that the contracts provision that charges for sewer service were to be "competitive with charges made by others for similar services in the South Baldwin County vicinity" was analogous to phrases such as "fair market value" and "reasonable price" which "have been uniformly held to be sufficiently definite for enforcement." Ms. *18-19 (string citing cases holding such phrases enforceable).

Related Documents: Garden of Glenlakes Property Owners v Baldwin County Sewer Service

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