SE Property Holdings, LLC v. The Rookery III, A Condominium, Owners' Association, Inc., 1:11-cv-00629

Background

Vision Bank foreclosed on The Rookery III project and conveyed the property to SE Property Holdings (SPH).
SPH later acquired the project from Vision/foreclosing lender and tensions with the Association over assessments, records access, and governance escalated into federal court litigation.
The Association signed 81 liens in October 2011 against SPH’s parcels; Vision and SPH argued the liens were invalid; liens were released in November 2011 but claims continued.
SPH purchased the 16 Other Units and the 2 Incomplete Units in 2012; the remaining 63 Unbuilt Units consisted of unimproved land and were never built.
The Alabama Uniform Condominium Act requires all common expenses to be assessed against units; the Declaration defines a unit by interior boundaries, which SPH argues excludes the 63 Unbuilt Units from unit status.
In July 2010, seven unit owners set a $400/month assessment; Paragraph 46 of the Bylaws preserves a last-prior-assessment amount where annual assessments were not made.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether SPH owes any monthly assessments for The Rookery III units	SPH claims no assessments are owed due to procedural flaws.	Association contends a valid $400 per unit assessment exists and SPH is responsible.	SPH is not obligated to pay assessments for the 63 Unbuilt Units; valid assessments exist for built units.
Whether the 63 Unbuilt Units are 'units' subject to assessments	63 Unbuilt Units are bare land, not units, thus not subject to assessments.	Act and documents treat all common expenses as assessments against all units, including unbuilt ones.	63 Unbuilt Units are not units under The Rookery III documents; thus no assessments (or related damages) may be imposed for them.
Whether SPH is entitled to call meetings and cast votes in the Association	SPH holds proxies from buyers granting voting rights; proxies are irrevocable and allow action.	Irrevocable proxies violate Bylaws and are not authorized by governing documents.	Irrevocable proxies are invalid; SPH cannot call special meetings or vote; declaratory relief denied on this point.
SPH's claim against Cooper for denial of access and slander of title	Cooper denied access to books/records and signed liens slandering SPH’s title.	Cooper contends records were never in her custody/control and the claims lack substantial justification.	Cooper not liable for Rule 11 sanctions; SPH’s access claim against Cooper dismissed for lack of custody; slander-of-title claim dismissed.
Whether SPH's slander-of-title claim remains viable regarding unimproved land	Liens and assessments on unimproved land disparaged SPH’s title and damaged sale value.	No proven special damages or false/malicious statements proven; unimproved land not enough to sustain claim.	Slander-of-title claim dismissed for lack of proof of malice and special damages.
ALAA sanctions against SPH or Cooper	Cooper seeks sanctions; SPH asserts claims were colorable and not frivolous.	Damages/fees warranted for frivolous actions under ALAA.	Cooper's ALAA counterclaim denied; SPH’s ALAA position rejected; no sanctions imposed.

Key Cases Cited

Folmar v. Empire Fire and Marine Ins. Co., 856 So.2d 807 (Ala. 2003) (slander of title elements and damages)
Harrison v. Mitchell, 391 So.2d 1038 (Ala.Civ.App. 1980) (special damages requirement in slander of title)
Aluminum Industries Corp. v. Camelot Trails Condominium Corp., 535 N.W.2d 74 (Wis. App. 1995) (unit definition vs. declaration controlling boundaries)
Mountain View Condominiums Homeowners Ass’n Inc. v. Scott, 883 P.2d 453 (Ariz.App. Div. 2 1994) (notice requirements and substantial compliance under condo law)
Pilgrim Place Condominium Ass’n v. KRE Properties, Inc., 666 A.2d 500 (Me. 1995) (unit/unbuilt status and assessment obligations under condo declarations)