THIS OPINION HAS
NO PRECEDENTIAL VALUE. IT SHOULD NOT BE CITED OR RELIED ON AS
PRECEDENT IN
ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 239(d)(2), SCACR.
THE STATE OF SOUTH CAROLINA
In The Court of Appeals
Ashley Villas Homeowners Association, Inc., Appellant,
v.
Geona Shaw Johnson; et al., Respondents.
Appeal From Charleston County
Thomas L. Hughston, Jr., Circuit Court
Judge
Unpublished Opinion No. 2004-UP-614
Submitted November 1, 2004 Filed
December 7, 2004
REVERSED
Helen Ann Harper and Robert A. Kerr, Jr., both of Mt. Pleasant,
for Appellant.
Benjamin Goldberg, of Charleston, for Respondent.
PER CURIAM: Ashley Villas Homeowners Association appeals from an order
granting summary judgment to Respondents. We reverse.
[1]
FACTS
Ashley Villas is a residential neighborhood constituting 234 townhouse properties.
Thomas M. Evans (the developer) developed the neighborhood in 1974. At
that time, the developer recorded the original restrictive covenants in the
Register of Mesne Conveyance (RMC) office for Charleston County.
The developer built and maintained common recreation
areas in the neighborhood; however, he deeded the recreation areas to the
Ashley Villa homeowners in 1976. The homeowners accepted the transfer and
created the Recreation Association to maintain the areas. The Recreation
Association was incorporated as a nonprofit organization in March 1976.
By 1990, the neighborhood had fallen into a state
of disrepair. As a result, a group of homeowners organized an effort to improve
the neighborhood. The group sought the votes necessary to amend the original
covenants and to establish a homeowners association to enforce the covenants.
In December 1994, the group recorded the amended covenants and the creation
of the Homeowners Association in the RMC.
Initially, the Recreation Association continued
to own the recreation areas. However, the Recreation Associations members
voted to transfer the recreation areas to the newly created Homeowners Association
because the association lacked the funds necessary to maintain the areas.
The Homeowners Association accepted the transfer in December 1998.
On August 9, 2000, the Homeowners Association brought
an action to collect past due annual assessments from delinquent homeowners.
The trial court ordered arbitration and an arbitration hearing was held on
June 13, 2001. The arbitrator found in favor of the Homeowners Association
and awarded it past due annual assessments and attorneys fees. Respondents
appealed and the judge granted them a right to a jury trial. The Homeowners
Association then filed a motion for summary judgment, which was denied on
December 20, 2001. Respondents also filed a motion for summary judgment and
a hearing was held on September 18, 2003. The trial court granted Respondents
motion for summary judgment on November 18, 2002. The Homeowners Association
now appeals.
STANDARD OF REVIEW
On appeal from an order granting summary judgment, we review all ambiguities,
conclusions, and inferences arising from the evidence in a light most favorable
to the non-moving party. Ferguson v. Charleston Lincoln Mercury, Inc.,
349 S.C. 558, 563, 564 S.E.2d 94, 96 (2002). Summary judgment is appropriate
when it is clear that there is no genuine issue of material fact and the
conclusions and inferences to be drawn from the facts are undisputed.
Etheredge v. Richland Sch. Dist. One, 341 S.C. 307, 311, 534 S.E.2d
275, 277 (2000). Moreover, summary judgment is proper only when the moving
party is entitled to a judgment as a matter of law. Jackson v. Doe,
342 S.C. 552, 555, 537 S.E.2d 567, 568 (Ct. App. 2000).
Summary judgment is not appropriate where further inquiry into the facts
of the case is desirable to clarify the application of the law. Tupper
v. Dorchester County, 326 S.C. 318, 325, 487 S.E.2d 187, 191 (1997).
Summary judgment should not be granted even when there is no dispute as
to evidentiary facts if there is dispute as to the conclusion to be drawn
from those facts. Id. Summary judgment is a drastic remedy, which
should be cautiously invoked so that no party will be improperly deprived
of a trial of the disputed factual issue. Schmidt v. Courtney, 357
S.C. 310, 318-319, 592 S.E.2d 326, 331 (Ct. App. 2003).
LAW/ANALYSIS
I. Extrinsic Evidence
The
Homeowners Association argues the trial court erred in admitting extrinsic
evidence to explain the terms of the original covenants because the evidence
violates the parol evidence rule. We
agree.
The parol evidence
rule prevents the introduction of extrinsic evidence of agreements or understandings
contemporaneous with or prior to execution of a written instrument when
the extrinsic evidence is to be used to contradict, vary, or explain the
written instrument. Redwend Ltd. Pship v. Edwards,
354 S.C. 459, 471, 581 S.E.2d 496, 502 (Ct. App. 2003). The cardinal rule
of contract interpretation is to ascertain and give effect to the intention
of the parties and, in determining that intention, the court looks to the
language of the contract. Friarsgate, Inc. v. First Federal Sav. and
Loan Assn of South Carolina, 317 S.C. 452, 457, 454 S.E.2d 901, 905
(Ct. App. 1995). When a contract is unambiguous, clear, and explicit,
it must be construed according to the terms the parties have used, to be
taken and understood in their plain, ordinary, and popular sense. Id.
Ashley Villas
original covenants state that the [c]ovenants shall automatically renew . . .
unless a change in part or in whole shall be agreed upon by a majority vote of
the homeowners of Ashley Villas.
Respondents argue the developer never intended for Ashley Villas to have
a homeowners association.To
prove the developer did not intend for the language change in part or in
whole to include altering the original covenants to allow for the creation of
a homeowners association, the trial court allowed an affidavit from Alvie
Evans, an individual involved in the original development of Ashley Villas, to
be admitted as extrinsic evidence.However,
taken in the light most favorable to the Homeowners Association, the language
of the original covenants was unambiguous, clear, and explicit in its
plain, ordinary, and popular sense.Therefore,
the trial court erred in admitting Evans affidavit to prove the developers
intent.
Moreover, summary judgment was improper even if the language of the
original covenants was ambiguous because the determination of a partys intent
is a question of fact. Southern Financial Servs., Inc. v. Middleton,
349 S.C. 77, 81, 562 S.E.2d 482, 484 (Ct. App. 2002). Once the court decides
the language is ambiguous, evidence may be admitted to show the intent of the
parties. Id. Examined in the light most favorable to the Homeowners
Association, there is conflicting evidence as to the developers intent.
Evans affidavit stated the developer did not include a homeowners association
in the original covenants because he did not intend for one to be created.
Phoebe Miller, a past president and current treasurer of the Homeowners Association,
testified the developer did not provide for a homeowners association because
he wanted federal assistance financing. Miller also testified the homeowners
created a Homeowners Association because of new federal guidelines requiring
a homeowners association for federal financing. The conflicting evidence
of Evans affidavit and Millers testimony create a genuine issue of material
fact as to whether the developer intended to qualify for federal financing
or to exclude a homeowners association. Therefore, even if the trial court
properly admitted the extrinsic evidence, summary judgment was improper because
a genuine issue of material fact exists regarding the developers intent.
II. South Carolina Nonprofit Corporation
Act
The Homeowners Association also contends the trial court erred in holding
the Recreation Association failed to comply with the South Carolina Nonprofit
Corporation Act. Specifically, the Homeowners Association argues a genuine
issue of material fact exists as to whether the notice requirements of section
33-31-1202(c) of the South Carolina Code (Supp. 2003) were satisfied. We
agree.
The sale of assets
by a nonprofit corporation other than in the ordinary course of activities
is governed by section 33-31-1202 of the South Carolina Code (Supp. 2003).
A nonprofit corporation may:
[S]ell, lease, exchange, or otherwise dispose of all, or substantially all,
of its property, with or without the goodwill, other than in the usual and
regular course of its activities on the terms and conditions and for the consideration
determined by the corporations board if the proposed transaction is authorized
by subsection (b).
S.C. Code Ann. § 33-31-1202(a)
(Supp. 2003).
However, section (c) further states:
If the corporation does not have members, or does not have members entitled
to vote on the transaction, the transaction must be approved by a vote of
a majority of the directors in office at the time the transaction is approved.
In addition, the corporation shall provide notice of any directors meeting
at which such approval is to be obtained in accordance with Section 33-31-822(c).
The notice also must state that the purpose, or one of the purposes, of the
meeting is to consider the sale, lease, exchange, or other disposition of
all, or substantially all, of the property or assets of the corporation and
contain or be accompanied by a copy or summary of a description of the transaction.
S.C. Code Ann. § 33-31-1202(c)
(Supp. 2003).
If a nonprofit corporation has members entitled to vote, the proposed transaction
must be approved by the board and by two-thirds of members votes cast or
a majority of the voting power, whichever is less. S.C. Code Ann. § 33-31-1202(b)
(Supp. 2003). A directors attendance at or participation in a meeting waives
the notice requirement for the meeting. S.C. Code Ann. § 33-31-823(b) (Supp.
2003).
At trial,
Respondents argued the transfer of the recreation area from the Recreation
Association to the Homeowners Association was invalid because the Recreation
Association failed to comply with the notice requirements of section 33-31-1202(c)
of the South Carolina Code. Specifically, Respondents alleged some Recreation
Association members and directors did not receive notice of the transfer or
vote on the transfer, rendering the transfer invalid. The trial court agreed
and held the Homeowners Association could not charge any assessments because
it did not own, lease, or have a duty to maintain the recreation areas as
the transfer was invalid for failure to comply with South Carolina Code section
33-31-1202.
Taken in the light most favorable to the Homeowners Association, a genuine
issue of material fact exists as to whether the requisite number of directors
and members of the Recreation Association received notice and voted on the
transfer. The parties presented conflicting evidence of the number of Recreation
Association directors at the time of the transfer. Michael Oshinsky, president
of the Homeowners Association, testified the three directors who voted unanimously
to transfer the recreation areas to the Homeowners Association were also
the only remaining members of the Recreation Association. Oshinsky testified
the notice provision of section 33-31-1202 of the South Carolina Code was
satisfied because the three directors were the only members and their vote
for the transfer waived the notice requirements. Moreover, evidence suggested
the Recreational Association had no members after May 3, 1996, which was more
than four months prior to the September 22, 1996 vote to transfer the property
to the Homeowners Association.
[2] Therefore, summary judgment was improper.
REVERSED.
ANDERSON, STILWELL, and SHORT, JJ., concur.
[1] We decide this case without oral argument pursuant
to Rule 215, SCACR.
[2] The Record on Appeal includes a list of members, an itemized category
report, and check register for the Recreation Association. The last deposit
for a membership fee was made on May 3, 1995, and because memberships were
annual the last membership would have expired on May 3, 1996, more than four
months before the meeting to transfer the recreation areas to the Homeowners
Association.