Chappell v. Wyngate Homeowners Ass'n, Inc.

• Court: Court of Appeals of North Carolina
• Decided: October 21, 2014
• Docket: 14-285
• Status: Unpublished

Opinion

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

NO. COA14-285 NORTH CAROLINA COURT OF APPEALS

Filed: 21 October 2014

RON E. CHAPPELL, CHARLES AND HAZEL PITTMAN, JAMES AND DEBORAH ROSE, EDWIN AND HAZEL WHITE, THE PARK AT WESTGATE TOWNHOUSE ASSOCIATION, INC., Plaintiffs,

v. Wake County No. 13 CVS 11260 WYNGATE HOMEOWNERS ASSOCIATION, INC., Defendant.

Appeal by defendant from order entered 23 August 2013 by

Judge Robert F. Johnson in Wake County Superior Court and order

entered 18 October 2013 by Judge William R. Pittman in Wake

County Superior Court. Heard in the Court of Appeals 10

September 2014.

Wyrick Robbins Yates & Ponton LLP, by Tobias S. Hampson and K. Edward Greene, for Plaintiffs-appellees.

Rossabi Black Slaughter, P.A., by Gavin J. Reardon and Amiel J. Rossabi, for Defendant-appellant.

ELMORE, Judge.

Wyngate Homeowners Association (“defendant”) appeals from

an order denying its motion to amend and an order granting -2- summary judgment to The Park at Westgate Townhouse Association,

Inc. (“plaintiff Park”) and seven individual members of

plaintiff Park, Ron E. Chappell, Charles and Hazel Pittman,

James and Deborah Rose, and Edwin and Hazel White (“individual

plaintiffs”). In its brief, however, defendant fails to

articulate any argument related to the trial court’s order

denying its motion to amend. Thus, defendant has abandoned

appellate review of that order pursuant to the North Carolina

Rules of Appellate Procedure. See N.C.R. App. P. 28(a).

Defendant argues that the trial court erred in granting

summary judgment to plaintiff Park and the individual plaintiffs

(collectively “plaintiffs”) and plaintiff Park lacks standing to

bring suit. After careful consideration, we affirm the trial

court’s order granting plaintiffs’ motion for summary judgment

and hold that plaintiff Park has standing.

I. Background

The Park and Wyngate are two housing subdivisions in Wake

County. The two communities are separated by a public street

and right of way. Homeowners in The Park community are members

of plaintiff Park (The Park Townhouse Association) and defendant

(the Wyngate Homeowners Association) pursuant to Section 3.3 of

the Declaration of Covenants, Conditions and Restrictions for -3- plaintiff Park (“plaintiff Park Declaration”). That section of

the plaintiff Park Declaration further provides that members of

plaintiff Park “shall have all rights, privileges, and benefits

as well as the obligations, assessments, and restrictions [of

defendant].” The individual plaintiffs are all members of

plaintiff Park and defendant. On 10 August 2012, plaintiffs

filed a complaint against defendant seeking monetary damages and

declaratory judgment for a determination that defendant’s

assessment fees to plaintiff Park members should be based upon

the cost to defendant. Plaintiffs later voluntarily dismissed

their claim for monetary damages.

Defendant charges an annual assessment fee to each of its

members, including members of plaintiff Park. Defendant has

assessed members of plaintiff Park the same fee as defendant’s

other members. After members of plaintiff Park expressed

concern that their assessments from defendant were too high,

defendant began paying an annual rebate to plaintiff Park.

Defendant paid this rebate from 2002 until 2012, discontinuing

it in 2013.

Defendant’s Declaration of Covenants, Conditions and

Restrictions (“Defendant’s Declaration”) states that

“[a]ssessments with respect to a sub-class of membership shall -4- be determined by the cost to [defendant], experienced or

reasonably anticipated, of carrying out the purposes of

assessments, as applied to the sub-classes of memberships.”

Believing plaintiff Park to be a “sub-class of membership” of

defendant and therefore subject to assessments separate from

other members, plaintiffs filed a complaint seeking a

declaratory judgment that would require defendant to assess

members of plaintiff Park fees based upon the cost to defendant.

The trial court granted plaintiffs’ motion for summary judgment

and ordered that defendant charge assessments to members of

plaintiff Park based upon the cost to defendant.

II. Analysis

a.) Summary Judgment

Defendant first argues the trial court erred in granting

summary judgment to plaintiffs because plaintiffs failed to

produce evidence that they were members of a properly created

Sub-Association under Defendant’s Declaration. We disagree.

“Our standard of review of an appeal from summary judgment

is de novo; such judgment is appropriate only when the record

shows that ‘there is no genuine issue as to any material fact

and that any party is entitled to a judgment as a matter of

law.’” In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, -5- 576 (2008) (quoting Forbis v. Neal, 361 N.C. 519, 524, 649

S.E.2d 382, 385 (2007)).

(i) Defendant’s Judicial Admission

A judicial admission is a formal concession which is made by a party in the course of litigation for the purpose of withdrawing a particular fact from the realm of dispute. Such an admission is not evidence, but it, instead, serves to remove the admitted fact from the trial by formally conceding its existence.

Outer Banks Contractors, Inc. v. Forbes, 302 N.C. 599, 604, 276

S.E.2d 375, 379 (1981)(citations omitted). “Facts alleged in

the complaint and admitted in the answer are conclusively

established by the admission.” Harris v. Pembaur, 84 N.C. App.

666, 670, 353 S.E.2d 673, 677 (1987).

In Paragraph 1 of plaintiffs’ complaint, they allege that

plaintiff Park “is a sub-association of [defendant].” Defendant

admitted to Paragraph 1 in its Motion to Dismiss and Answer.

The fact that plaintiff Park is a sub-association of defendant

is therefore conclusively established by defendant’s admission

to plaintiffs’ allegation in the complaint. Moreover, in

Paragraph 24 of its Motion to Dismiss and Answer, defendant

explicitly states that “[i]t is admitted that [plaintiff Park]

is a sub-association of [defendant].” Defendant acknowledges

that its statements in Paragraphs 1 and 24 of its Motion to -6- Dismiss and Answer are judicial admissions and concede that

plaintiff Park is a sub-association of defendant.

However, defendant seeks to distinguish “sub-associations”

(lower-case “s” and “a”) from “Sub-Associations” (capital “S”

and “A”). Defendant argues that because plaintiffs never

alleged that plaintiff Park is a “Sub-Association” as defined by

Defendant’s Declaration or a “sub-class of membership” of

defendant, plaintiffs’ use of the un-capitalized word “sub-

association” in the complaint refers to the “generic, non-

technical term[.]” Defendant defines the generic term “sub-

association” as “an association that is under, beneath, below,

or a smaller part of, another association” or “an association

that is subsumed within, and/or subordinate to, another

association.” After applying the following legal principles of

contract interpretation to the case at bar, we disagree with

defendant’s position.

(ii) Contract Interpretation

“[W]henever a court is called upon to interpret a contract

its primary purpose is to ascertain the intention of the parties

at the moment of its execution.” Cleland v. Children’s Home,

Inc., 64 N.C. App. 153, 156, 306 S.E.2d 587, 589 (1983)(citing

Lane v. Scarborough, 284 N.C. 407, 409-10, 200 S.E.2d 622, 624 -7- (1973)). “Contract interpretation depends in the first instance

on the language of the instrument itself.” Citrini v. Goodwin,

68 N.C. App. 391, 394, 315 S.E.2d 354, 358 (1984). “When the

terms of a contract are plain and unambiguous, there is no room

for construction. The contract is to be interpreted as written

and enforced as the parties have made it.” State v. Philip

Morris USA Inc., 363 N.C. 623, 632, 685 S.E.2d 85, 91

(2009)(citations and quotation marks omitted). “[A]n ambiguity

exists in a contract if the language of the contract is fairly

and reasonably susceptible to either of the constructions

asserted by the parties.” Mosely v. WAM, Inc., 167 N.C. App.

594, 597–98, 606 S.E.2d 140, 142 (2004)(citation and quotation

marks omitted). Additionally, “[w]here a contract defines a

term, that definition is to be used.” Premier, Inc. v.

Peterson, __ N.C. App. __, __, 755 S.E.2d 56, 61 (2014).

We cannot agree with defendant that plaintiffs were

required to capitalize the lettering and elaborate upon the term

“sub-association” in order to make clear that plaintiffs alleged

that plaintiff Park was a Sub-Association as defined by

Defendant’s Declaration. Plaintiffs’ complaint consistently

references Defendant’s Declaration throughout, with Paragraph 16

quoting the definition of “Sub-Association” from the contract. -8- Paragraph 20 references sub-associations (note the lower-case

letters) with regard to assessments for members of defendant as

set forth by Defendant’s Declaration. Whether capitalized or

not, “sub-association” in plaintiffs’ complaint clearly refers

to “Sub-Association” as defined by the Defendant’s Declaration.

See Premier, __ N.C. App. at __, 755 S.E.2d at 61 (asserting

that when a contract specifically defines a term, “that

definition is to be used”). Defendant’s judicial admission that

“[plaintiff Park] is a sub-association of [defendant]” is

therefore an admission that plaintiff Park is a Sub-Association

as defined by Defendant’s Declaration.

Additionally, we see no ambiguity in the language of

Defendant’s Declaration. Under the pertinent terms of the

contract, a “Sub-Association” is defined as “sub-classes of

membership in the Association created in accordance with the

provisions of Article V of this Declaration.” Using the plain

language of that provision, plaintiff Park is a “sub-class of

membership” of defendant because it is a sub-association of

defendant. Defendant’s Declaration further states that

“[a]ssessments with respect to a sub-class of membership shall

be determined by the cost to the [defendant], experienced or

reasonably anticipated, of carrying out the purposes of -9- assessments, as applied to the sub-classes of memberships.”

Thus, assessments to plaintiff Park must be made based upon the

cost to defendant. Accordingly, the trial court did not err in

granting summary judgment to plaintiffs.

b.) Standing

Defendant also asserts that this Court lacks subject matter

jurisdiction to hear this appeal because plaintiff Park does not

have standing to bring suit on behalf of itself or on behalf of

its members. We disagree. Even if we assume arguendo that

plaintiff Park does not have individual standing, defendant’s

argument fails because plaintiff Park has representative

standing.

“Whether a party has standing is a question of law which we

review de novo, and may be raised for the first time on appeal

and by this Court’s own motion.” McCrann v. Pinehurst, LLC, ___

N.C. App. ___, ___, 737 S.E.2d 771, 775 (2013)(citations

omitted). Jurisdiction in North Carolina requires a justiciable

case or controversy and “[s]tanding is a necessary prerequisite

to the court’s proper exercise of subject matter jurisdiction.”

Creek Pointe Homeowner’s Ass’n v. Happ, 146 N.C. App. 159, 164,

552 S.E.2d 220, 225 (2001). “In North Carolina, homeowners’

associations historically have enjoyed the general right to -10- participate in litigation. Our appellate courts have considered

suits brought by homeowners’ associations on a case-by-case

basis[.]” Id. at 163, 552 S.E.2d at 224. A homeowners’

association can bring suit as a plaintiff either on behalf of

itself “or as a representative of injured members of the

organization.” Id. at 165, 552 S.E.2d at 225.

(i) Representative Standing for Associations

[A]n association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted, nor the relief requested, requires the participation of individual members in the lawsuit.

Creek Pointe, 146 N.C. App. at 165, 552 S.E.2d at 225 (citing

Hunt v. Washington State Apple Advertising Commission, 432 U.S.

333, 343, 53 L. Ed. 2d 383, 394 (1977)). However, an

association typically “lacks standing to sue for money damages

on behalf of its members if the damage claims are not common to

the entire membership, nor shared equally, so that the fact and

extent of injury would require individualized proof.” Id. at

167, 552 S.E. 2d at 226 (citing Warth v. Seldin, 422 U.S. 490,

515–16, 45 L. Ed. 2d 343, 364 (1975)).

Here, plaintiff Park has standing to bring suit on behalf

of its members if: 1.) its members would have standing to sue -11- in their own right, 2.) the interests it seeks to protect are

germane to plaintiff Park’s purpose, and 3.) neither the claim

asserted nor the relief requested requires all of its individual

members to participate in the lawsuit.

Plaintiff Park satisfies the first prong of the test

because its members are also members of defendant and are

subject to the defendant’s contested assessments. Thus, its

members would have standing to sue in their own right.

With regard to the second prong, defendant argues that the

interests plaintiff Park seeks to protect are not germane to its

purpose. However, plaintiff Park’s Declaration states that its

purpose is “enhancing and protecting the value, desirability,

and attractiveness of the real property.” The alleged

overcharge of assessment fees affects all areas covered in

plaintiff Park’s statement of its intended purpose. Thus, the

interests plaintiff Park seeks to protect are clearly germane to

its purpose.

Finally, defendant asserts that plaintiff Park cannot

satisfy the third prong because the relief sought in the

complaint requires participation of the individual Park townhome

owners. However, owners of the Park community townhomes are all

members of plaintiff Park and defendant. Thus, the relief -12- sought in the complaint is common to all members of plaintiff

Park and does not require the participation of all individual

townhome owners.

Accordingly, plaintiff Park has standing to bring this suit

on behalf of its members.

III. Conclusion

In sum, the trial court did not err by granting plaintiffs’

motion for summary judgment. Moreover, plaintiff Park has

standing to bring suit on behalf of its members in this case.

Affirmed.

Judges CALABRIA and STEPHENS concur.

Report per Rule 30(e).