Opinion
NO. 2013-CA-000049-MR NO. 2013-CA-000087-MR
06-13-2014
BENKY, LLC APPELLANT v. KENAR ARCHITECTURAL AND ENGINEERING, INC.; THEO AND MARY GAMMEL; WILLIAM S. AND CATHERINE CARR; J.D. GAMMEL; ROBERT AND VERENDA JOHNSON; JAMES AND SARA COTHRAN; CLINTON AND INA HORTON; ANDREW AND LORI JO WILLIAMS; LEWIS AND RENEE MATHIS; WILLIAM FARR; GERALD AND ANN LUTTERMAN; GREG CULVER FOR THE ESTATE OF PEGGY CULVER; MICHAEL AND TERESA MOSS; RICHARD AND DEBRA DAMON APPELLEES AND KENAR ARCHITECTURAL AND ENGINEERING, INC.; THEO AND MARY GAMMEL; WILLIAM S. AND CATHERINE CARR; J.D. GAMMEL; ROBERT AND VERENDA JOHNSON; JAMES AND SARA COTHRAN; CLINTON AND INA HORTON; ANDREW AND LORI JO WILLIAMS; LEWIS AND RENEE MATHIS; WILLIAM FARR; GERALD AND ANN LUTTERMAN; GREG CULVER FOR THE ESTATE OF PEGGY CULVER; MICHAEL AND TERESA MOSS; RICHARD AND DEBRA DAMON CROSS-APPELLANTS v. BIRMINGHAM POINTE, LLC; BIRMINGHAM POINTE MANAGEMENT, LLC; PARAMOUNT GROUP, LLC; AND BENKY, LLC CROSS-APPELLEES
BRIEF FOR APPELLANT/ CROSS-APPELLEES: J. Duncan Pitchford Nicholas M. Holland Paducah, Kentucky BRIEF FOR APPELLEES/ CROSS-APPELLANTS: Jason F. Darnall George M. Carter Benton, Kentucky
NOT TO BE PUBLISHED
APPEAL FROM MARSHALL CIRCUIT COURT
HONORABLE DENNIS R. FOUST, JUDGE
ACTION NO. 07-CI-00467
CROSS-APPEAL FROM MARSHALL CIRCUIT COURT
HONORABLE DENNIS R. FOUST, JUDGE
ACTION NO. 07-CI-00467
OPINION
AFFIRMING
BEFORE: CLAYTON, MAZE, AND VANMETER, JUDGES. CLAYTON, JUDGE: This is an appeal from a decision of the Marshall Circuit Court. Based upon the following, we affirm the decision of the trial court.
BACKGROUND INFORMATION
At the trial court level, the parties agreed to the following stipulation of facts:
1. In the late 1990's and early 2000's, the Appellees purchased certain lots of real property from the Appellant's predecessors in interest and title.
2. Said lots were adjoining and/or appurtenant to a proposed, and eventually completed, golf course, previously known as Kerry Landing Golf Course, said golf course being owned by the Appellant's predecessors in interest and title.
3. The Appellees were among the first individuals and/or entities to purchase lots adjoining and/or appurtenant to the proposed, and eventually completed, golf course.
4. As an inducement to purchase their lots, the Appellees acquired along with the purchase of their respective lots written certificates which shall be referred to as "Family Playing Memberships." The parties hereto agree that these certificates speak for themselves.
5. In late 2004, foreclosure proceedings were commenced against, among others, the Appellant's predecessors in interest and title in Marshall Circuit Court Case No. 04-CI-193.
6. As part of these foreclosure proceedings, the Appellees, as well as all other owners of lots adjoining and/or abutting the golf course, were named as party defendants in that action to assert whatever interest they might have had in the golf course property.
7. Specifically, an allegation against these Appellees read in part as follows: "These defendants (which
includes some of the Plaintiffs in the case at bar) may claim an interest in and to said real property which is subject to this foreclosure action, including but not necessarily limited to the use and occupancy of said real property for the purpose of playing golf and other related purposes. These defendants (which includes some of the Plaintiffs in the case at bar) may have received a certificate from Tri-Star Development, the former owner to these lots, and/or from Kerry Landing which accords to these owners lifetime use of and occupancy upon such property for golf and other related uses."
8. At least one of the Family Playing Memberships was filed of record in the Marshall County Court Clerk's Office in January 2005, in Miscellaneous Book 100, pages 515-519.
9. Paramount Group, LLC acquired the golf course property in March-June 2005, being the same property previously owned by an entity and/or entities that had sold lots to these Appellees herein and that had tendered the Family Playing Memberships to these Appellees herein.
10. In approximately October-November 2009, the Appellant herein, as repayment for a loan made to Paramount Group, LLC, took title to the same golf course property from Paramount Group, LLC.
11. The same golf course property acquired by the Appellant from Paramount Group, LLC in October - November 2009, had been previously owned by the entity and/or entities who sold the lots in question to the Appellees herein and tendered the Family Playing Memberships in question to the Appellees herein.
12. Prior to the acquisition of this golf course property by the Appellant, the Family Playing Memberships were honored for a certain period of time by previous owners of this golf course property.
13. The Appellant has refused to honor the Family Playing Memberships in question.
14. The golf course has been closed to play since it was acquired by the Appellant.
After a submission of the issue to the trial court on the record, the trial court found that the Family Playing Memberships (Memberships) were not easements due to the lack of formality and granting language in the title. Instead, the trial court found that the Memberships were irrevocable licenses because the Appellees were granted them as a material inducement for lot purchase. The trial court also held that the licenses run with the land because the Appellant had inquiry notice of them due to their being recorded. The trial court awarded each Appellee $2,400 in damages which was $100 per month for the two years they had been denied the use of their memberships. The damages totaled $31,200.00. The Appellant then brought this appeal.
STANDARD OF REVIEW
We review issues of law de novo. Lewis v. B&R Corp., 56 S.W.3d 432, 436 (Ky. App. 2001).
DISCUSSION
The Appellant first asserts that the Memberships do not constitute licenses and that the trial court erred when it held that they did. The trial court held as follows:
Plaintiffs are the holders of viable and enforceable licenses. Although a license is generally revocable at the will of the property owner, the owner may be equitably estopped from revoking said license if the license[e] has relied to his detriment on the license. Bob's Ready to Wear, Inc. v. Weaver, 569 S.W. 2d 715 (Ky. App. 1978)]. Additionally, the property owner revoking a license may be held liable for damages in the nature of a breach of contract action. See Restatement (First) of Property Subsection 519 Revocation, Comment b (1944).
...at least one of the [Memberships] was duly recorded ... This recording took place well before the Defendant in this case took ownership of the golf course property. . . with notice of the easements in gross (or licenses as the case may be). As stated ... in Hauseman Motor Co. v. Napierella, [3 S.W.2d 1084 (Ky. 1928)], a duly recorded instrument serves as notice to the world of its particular contents...
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Therefore, since the Defendant had notice of the interests claimed by these Plaintiffs, it is bound by the contents of the Family Playing Memberships the same as if it had read the instruments prior to its acquisition of the property in question.
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The licenses were granted by the Defendant's predecessor as a material inducement to the Plaintiffs.
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The Defendant also asserts that a license does not run with the land, and that Defendant should not be subject to it. The Court finds otherwise. The certificates were issued by Tri-Star Land Development Company, LLC, which at the time of issuance was doing business as Kerry Landing Golf Course. The golf course itself was in fact conveyed to "Kerry Landing Golf Course, LLC" by deed dated August 3, 1998.
The trial court held that the Memberships were an incentive to purchase the lots, that the Appellant was on notice due to it being recorded and that the Appellees were entitled to damages based upon the granting of a license.
"A license in respect to real property is an authority or permission to do a particular act or series of acts upon the land of another without possessing any interest or estate in such land. No formal language is necessary to create a license as long as the proper intent appears, and, in the absence of a statute of prohibition, it may be created by parol." Smallwood v. Diz, 245 S.W. 2d 439, 440 (Ky. 1952). Appellant argues the Memberships do not constitute licenses due to their lack of specificity in their description. We disagree.
To begin, Smallwood clearly sets forth that no formal language is necessary, just the appearance of intent. Id. In this case, the Memberships named the golf course, Kerry Landing Golf Course, and stated that they were memberships to play golf. It also had terms and conditions such as the fact that it was only available to the members of each household and that the only golf course involved was Kerry Landing. The trial court did not err in finding this was sufficient language for a license.
Next, the Appellant contends that the trial court erred in finding the Memberships were irrevocable. They argue that there was a lack of identity of the parties and there was insufficient evidence to find that the Appellees were induced to purchase their lots by the extending of the Memberships.
If a licensee has relied to his detriment on a license, the owner may be estopped from revoking the license. Bob's Ready to Wear, Inc. v. Weaver, 569 S.W.2d 715 (Ky. App. 1978). The trial court did not err in finding that the Appellees relied to their detriment on the licenses given that they were enticed and induced into purchasing lots based upon the free memberships.
Finally, the Appellant contends that the trial court erred in finding that the licenses were enforceable against them and that they had no notice of the licenses. The trial court set forth in its opinion that "[a] license which, because of its being executed, is irrevocable against the licensor, is also irrevocable against a purchaser from the licensor with notice[.]" See 53 C.J.S. Licenses § 144 (2005). PSP North, LLC v. Attaboys, LLC, 391 S.W.3d 396 (Ky. App. 2013).
As set forth in the trial court's opinion, the parties stipulated that at least one of the Memberships was recorded in the Marshall County Clerk's Office prior to the Appellant purchasing the property. The trial court found that at least three Family Playing Memberships were recorded in January 2005 in Misc. Book 100, pages 515-519. The parties also stipulated that the Appellees were named in a foreclosure complaint against the Appellant's predecessor in title solely because of the "Family Playing Memberships." Thus, the trial court did not err in determining that the Appellant was on notice.
Based upon the above, we affirm the decision of the trial court.
MAZE, JUDGE, CONCURS.
VANMETER, JUDGE, CONCURS IN RESULT ONLY. BRIEF FOR APPELLANT/
CROSS-APPELLEES:
J. Duncan Pitchford
Nicholas M. Holland
Paducah, Kentucky
BRIEF FOR APPELLEES/
CROSS-APPELLANTS:
Jason F. Darnall
George M. Carter
Benton, Kentucky