You are on page 1of 13

IN THE CIRCUIT COURT OF MADISON COUNTY, ALABAMA

CARL E. FALLIN, SR., )


)
Plaintiff, )
)
v. ) Civil Action No. ______________
)
CITY OF HUNTSVILLE, )
)
Defendant. )
COMPLAINT
This action seeks declaratory and injunctive relief against a municipality which has
given away public property, and is threatening to give away public property, in a manner not
permitted by the Alabama Constitution and under the guise of economic development. It also
seeks relief to obtain public records related to this give away.
The Parties
1. Plaintiff Carl E. Fallin, Sr. (Fallin), is an individual resident citizen and pays
taxes to the City of Huntsville regularly. He operates a business within the City of Huntsville
and pays an annual tax which gives him the authority to conduct his business there.
2. Defendant City of Huntsville (Huntsville) is a municipal corporation
organized and existing under the laws of the State of Alabama.
Jurisdiction and Venue
3. This Court has jurisdiction over the subject matter of this action pursuant to
142 of the Alabama Constitution and Ala. Code 12-11-30, -31, and -33. Relief is
ELECTRONICALLY FILED
10/22/2014 3:44 PM
47-CV-2014-902167.00
CIRCUIT COURT OF
MADISON COUNTY, ALABAMA
JANE C. SMITH, CLERK
authorized by Ala. Code 6-6-500, Ala. Code 6-6-220, et seq., and Rules 57 and 65, Ala.
R. Civ. P.
4. Venue is proper in this Court over an action in which Huntsville is a defendant
because Huntsville is located within Madison County, Alabama; a substantial part of the acts
or omissions giving rise to this action occurred in Madison County, Alabama; and the real
property that is the subject of this action is located within Madison County, Alabama.
Facts
5. This action challenges Huntsvilles improper financing of a project commonly
known as Parkside Town Centre (the Parkside Project), which is the proposed site for
a Cabelas, Inc. (Cabelas) outdoor retail store in Huntsville. The developers of the
Parkside Project are Mike Culbreath, a public official and member of the Huntsville City
School Board; James Packard; and their business entities Attitude, L.L.C. (Attitude), and
Mushashi, LLC (Mushashi, and, together with Culbreath, Packard, and Attitude,
Developers).
6. Huntsville and Developers have entered into a series of real estate contracts and
transactions whereby Huntsville has paid or will pay approximately $7.6 million to, or on
behalf of, Developers to purchase property with an appraised value that is dramatically less
than the amount paid.
7. Huntsvilles contribution of money to the Parkside Project does not follow
customary procedures for use of public resources for economic development. A portion of
the public monies used by Huntsville, as described herein, include the taxes paid by Fallin.
2
Unless relief is granted to Fallin, his taxes will be needed to replenish monies spent by
Huntsville on the Parkside Project.
8. For the reasons described below, the proposed and completed transactions
between Huntsville and Developers should be enjoined and, if necessary, set aside.
9. In 2009, Developers identified the proposed location for the Parkside Project
in Huntsville, a 2-lot parcel (the Property), adjacent to which was located a
detention/retention area commonly known as Lake 5. Huntsville owned a utility and
drainage easement (the Easement) covering a large portion of the Property.
10. Developers persuaded the then-owners of the Property to sell the Property to
Packard for $306,000. After Packard contracted to purchase the Property, but before the sale
was closed, Huntsville vacated 28 acres of the Easement (leaving approximately 6 acres
covered). As a result, Developers could use the Property for the Parkside Project. Huntsville
vacated the Easement for absolutely no money and is now proposing to purchase, or has
purchased, a portion of the Property back from Developers for over $2 million, as described
below.
11. In 2012, after developing a portion of the Property, Developers decided to
expand the Parkside Project in order to attract Cabelas from a similar project in the City of
Madison called the Old Town Project. Huntsville entered into a series of real estate
transactions whereby Huntsville has paid or will pay approximately $7.6 million to or on
behalf of Developers -- not Cabelas -- to purchase property with a true appraised value
of less than $300,000.
3
12. Huntsville has concealed, and continues to conceal, the nature of the
transactions with Developers and the benefits to them. Among other things, Huntsvilles
officials have falsely disseminated information that the transactions with Developers were
necessary to attract Cabelas, when, in fact, they were not necessary.
13. Huntsville officials misrepresented to the public the amount of public funds
expended in connection with the announcement that Cabelas will locate a new store in
Huntsville. They have stated publicly that Huntsville has spent $2.9 million, when, in
actuality, Huntsville will pay more than $7.6 million. Moreover, those monies are being paid
to or for Developers -- not Cabelas.
14. On July 26, 2013, Packard entered into a contract with SMS Properties, L.L.C.,
to purchase approximately 10 acres of property adjacent to the Property for $850,000 (the
Cabelas Site). On April 28, 2014, Attitude closed on the sale of the Cabelas Site from
SMS Properties, L.L.C. Huntsville contracted with Developers to pay $3,584,200 for a
2.86-acre tract for Cabelas Drive (the ROW) and a 3-acre tract for a landscape buffer
(the Buffer Property) carved from the 10-acre Cabelas Site.
15. In addition, Huntsville contracted to pay Developers $2.1 million for 4 acres
to expand Lake 5 (the Lake Property) near the proposed site for the Cabelas outdoor
superstore. Huntsville has actually paid Developers $850,000 for 1.62 acres of the Lake
Property and has an option to purchase the remaining 2.38 acres of the Lake Property for
$1.25 million.
4
16. If Huntsville purchases the ROW, Buffer Property, and remaining Lake
Property it has agreed, or obtained an option, to purchase, Huntsville will have paid Attitude
$5,684,200 for real property, as well as spend approximately $2 million to build Cabelas
Drive; relocate water, sewer, and natural gas lines to serve the shopping center; add turn
lanes and a traffic signal on Governors West at the main entrance; and fill in a portion of
Lake 5.
17. Huntsvilles impermissible financing of the Parkside Project is not necessarily
apparent when considering the small investment (either the fictitious $2.9 million
investment or the more accurate investment of over $7.6 million) made by Huntsville.
It only becomes apparent when considering Developers investment in the ROW, Buffer
Property, and Lake Property and their actual or imminent return on their investment.
18. Specifically:
(1) Huntsville will purchase the 2.86-acre ROW from Attitude for
$1,749,125.66, while Packard originally paid only $306,000 for the entire 34.23-acre
tract of land on which the ROW is located;
(2) Huntsville will pay Developers $1,835,074.34 for the 3-acre Buffer
Property, when Developers paid only $850,000 for the entire 10-acre Cabelas Site,
on which the Buffer Property is located; and
(3) Huntsville paid $850,000 for 1.62 acres of the 4-acre Lake Property,
while Attitude paid only $133,250 for the entire Lake Property. Moreover, Huntsville
has an option to purchase the remaining 2.38 acres of the Lake Property for $1.25
5
million, over nine times the amount Attitude and the other Developers paid for the
Lake Property.
19. Neither Attitude nor the other Developers did anything to improve the ROW,
Buffer Property, or Lake Property or to otherwise cause their fair market values to
exponentially increase in value during the limited time they owned these properties. The
ROW, Buffer Property, and Lake Property remain in the same unimproved state as when
Developers purchased them in 2009. However, Developers stand to make a net profit on
their transactions with Huntsville in excess of $4.7 million.
20. Under Section 94 of the Alabama Constitution, it is unconstitutional, and in
excess of statutory power, for a municipality such as Huntsville to grant public money or a
thing of value in aid of or to any individual, association, or corporation, unless the action has
been fully advertised to the public, as provided in 94.01 and Amendments 191 and 245 of
the Constitution. Huntsvilles acts and omissions (as described above) are so arbitrary and
unreasonable as to constitute a misuse of power not authorized by law.
21. In its business relationship and actual or imminent transactions with
Developers, Huntsville has applied public funds or attempted to apply public funds for the
benefit of Developers -- virtually financing or bankrolling the Parkside Project.
22. In an October 1, 2014, letter (delivered to Huntsville on October 2, 2014),
Fallin requested that Huntsville make available to him for inspection and copying certain
records of Huntsville related to its activity and spending or planned spending of public funds
6
for the purpose of arranging for Cabelas to locate a retail store in Huntsville, and,
particularly, at the Parkside Project.
23. The particular items requested in Fallins October 1 letter were any and all
public writings or records concerning or related in any way to:
public money spent, or committed to be spent, directly or indirectly by
Huntsville for or on behalf of Cabelas, Developers, or any other person or
business entity associated with Cabelas or Developers;
the purchase, sale, lease, encumbrance, conveyance, or release of real property
by Huntsville within the Parkside Project and/or associated with Developers;
the appraisal or value of any real property purchased, sold, encumbered,
conveyed, or released by Huntsville within the Parkside Project and/or
associated with Developers;
the economic impact on Huntsville and/or Madison County associated with
Cabelas operations;
the escrow of money associated with Cabelas and/or the purchase, sale, lease,
encumbrance, conveyance, or release of real property by Huntsville within the
Parkside Project and/or associated with Developers;
public notice of the terms and conditions of and parties to the purchase, sale,
lease, encumbrance, conveyance, or release of real property by Huntsville
within the Parkside Project and/or associated with Developers;
public notice of the terms and conditions of and parties to transactions
involving money, benefits, or incentives provided, credit afforded, loans made,
financing of and/or payments directly or indirectly to Cabelas or Developers;
the documents made available or delivered to members of the City Council
related to Cabelas, Developers, and/or the purchase, sale, lease, encumbrance,
conveyance, or release of real property by Huntsville within the Parkside
Project and/or associated with Developers;
7
any resolution of the City Council, including, but not limited to, the resolution
adopted by the City Council on June 12, 2014 (No. 14-435), associated directly
or indirectly with Cabelas or the Parkside Project; and
the subjects or subject matter discussed in the minutes of the City Council on
June 12, 2014.
24. The time period of the requested documents was January 1, 2009, going
forward.
25. Fallin also requested the documents to be produced include not only physical
items but also electronically stored documents and communications.
26. Fallin has received no response from Huntsville concerning his October 1 open
records request.
COUNT ONE
Violation of the Open Records Act, Ala. Code 36-12-40 to -41
27. Fallin realleges and reasserts the preceding factual allegations as if fully set
forth herein.
28. The Open Records Act, Ala. Code 36-12-40, provides that [e]very citizen
has a right to inspect and take a copy of any public writing of this state ....
29. Fallin has requested particular public writings from Huntsville relating to the
above-described transactions concerning Cabelas.
30. In violation of 36-12-40, Huntsville has failed to make the requested
documents available to Fallin for inspection and copying.
8
WHEREFORE, premises considered, Fallin demands a judgment against Huntsville
that: (1) enjoins Huntsville, and all persons acting in concert with it from refusing, to make
available to him the records related to the Cabelas transactions as requested above; (2)
declares that Huntsville is required to provide the records requested; (3) deems void any
actions that the requested documents show were taken by meetings occurring in violation of
the Open Meetings Act, Ala. Code 36-25A-1, et seq.; and (4) provides such other relief as
may be just and proper, including an award of attorneys fees and costs of this action.
COUNT TWO
Violations of Ala. Const. art. IV, 94
31. Fallin realleges and reasserts the preceding factual allegations as if fully set
forth herein.
32. Huntsville has engaged, or will imminently engage, in the illegal or wrongful
conveyance, disposition, or diversion of municipal property. Indeed, Huntsvilles contracts
with Developers are illegal and constitute the unauthorized appropriation, use, and
expenditure of public funds in violation of Ala. Const. art. IV, 94, and not authorized by
Ala. Const. art. IV, 94.01, and Ala. Const. amends. 191 and 245. Huntsvilles actual and
proposed actions in purchasing the ROW, Buffer Property, and Lake Property has resulted
in waste and injury to Huntsvilles property and funds and to the community in general for
the benefit and aid of a private individual.
9
33. The actual or prospective purchases of the ROW, Buffer Property, and Lake
Property at excessive and unreasonable prices are affected by fraud (actual or constructive),
corruption, collusion, unfair dealing, and abuse.
34. Based on the above, an actual, justiciable controversy has arisen and now exists
between Fallin and Huntsville concerning the rights and obligations of Huntsville under any
contract with Developers.
35. Fallin desires a judicial determination of the rights, status, or other legal
relations of Huntsville and Developers based on the contracts for sale of the ROW, Buffer
Property, and Lake Property and the construction or validity of those contracts and other
declarations that will terminate the controversy or remove an uncertainty between Huntsville
and its citizens and taxpayers, such as: whether Huntsvilles acts and omissions related to the
Parkside Project and Developers violated public policy or were unlawful, unconstitutional,
or otherwise wrongful and improper; whether any actual sale of the ROW, Buffer Property,
or Lake Property must be set aside; whether any actual sale of the ROW, Buffer Property, or
Lake Property constitutes a misuse of public funds; and whether any proposed sale of the
ROW, Buffer Property, or Lake Property must be enjoined.
36. A judicial declaration is necessary and appropriate at this time under the
circumstances in order that Fallin may ascertain the rights, status, or other legal relations of
Huntsville and Developers based on the contracts for sale of the ROW, Buffer Property, and
Lake Property and the construction or validity of those contracts and other declarations that
will terminate the controversy or remove an uncertainty between Huntsville and its taxpayers.
10
37. If Huntsville and Developers are not enjoined from continuing their wrongful
conduct, including, but not limited to, the expenditure of public funds and the purchase and
sale of the ROW, Buffer Property, and Lake Property, then Fallin and other Huntsville
taxpayers will continue to suffer substantial and irreparable injury. Fallin has no adequate
remedy at law for the injuries and damages suffered by him and, therefore, he requests that
this Court issue a preliminary injunction and a permanent injunction after a trial on the
merits.
WHEREFORE, premises considered, Fallin demands a judgment against Huntsville
that provides the following relief:
A. A declaration that: (1) any actual or proposed purchase by Huntsville of the
ROW, Buffer Property, and Lake Property is void, illegal, and ultra vires; (2) any deed
conveying the ROW, Buffer Property, and Lake Property from Developers to Huntsville is
void and invalid; and (3) any deed conveying the ROW, Buffer Property, or Lake Property
is due to be canceled of record; and
B. Preliminary and permanent injunctive relief restraining and enjoining
Huntsville and its councilmen, mayor, officials, agents, and other persons or entities working
for, on behalf of, or in concert or participation with them from proceeding with any of the
property transfers between Huntsville and Developers and otherwise continuing their
wrongful conduct; and
C. Such other and further relief to which Fallin may show himself justly entitled
at law or in equity, including attorneys fees and costs of this action.
11
Respectfully submitted on October 22, 2014.
s/ Albert L. Jordan
Albert L. Jordan (JOR002)
s/ Matthew D. Fridy
Matthew D. Fridy (FRI035)
OF COUNSEL:
Wallace Jordan Ratliff & Brandt, LLC
800 Shades Creek Parkway, Suite 400
P.O. Box 530910
Birmingham, Alabama 35253
12
To be served by a process server at the following address:
City of Huntsville
c/o Chuck Hagood, City Clerk
308 Fountain Circle
Huntsville, Alabama 35801
13