Jinks v. Sea Pines Resort LLC

District Court, D. South Carolina·Decided October 8, 2021·No. 9:21-cv-00138·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA BEAUFORT DIVISION

JILL K. JINKS, individually and as trustee of ) the Jinks Heritage Trust, ) ) Plaintiff, ) ) No. 9:21-cv-00138-DCN vs. ) ) ORDER SEA PINES RESORT, LLC; COMMUNITY ) SERVICES ASSOCIATES, INC.; ) ASSOCIATION OF SEA PINES ) PLANTATION, PROPERTY OWNERS, ) INC. and THE ADVISORY BOARD, ) ) Defendants. ) _______________________________________)

The following matter is before the court on defendant Association of Sea Pines Plantation Property Owners Inc. and the Advisory Board’s (“ASPPPO”) motion to dismiss, ECF No. 44. For the reasons set forth below, the court grants in part and denies in part the motion. I. BACKGROUND This case concerns a referendum to amend certain Declaration of Covenants and Restrictions dated September 7, 1974, recorded in the Beaufort County, South Carolina Register of Deeds (the “1974 Covenants”). The 1974 Covenants, along with various other recorded covenants and declarations, govern the rights and responsibilities of property owners of Sea Pines Plantation located on Hilton Head Island, South Carolina. The 1974 Covenants were executed by the then-owner and developer of the Sea Pines Plantation community, Sea Pines Plantation Company, Inc. (the “Company.”). The Sea Pines Plantation community is comprised of residential properties, commercial properties, and the Sea Pines Resort, as well as golf courses, tennis courts, biking and leisure trails, and beach access. Defendant Sea Pines Resort, LLC (the “Resort”) currently owns and operates the Sea Pines Resort. On November 17, 2020, defendant Community Services Associates Inc. (“CSA”) called the referendum at issue to amend the 1974 Covenants. CSA is a South Carolina

nonprofit corporation that is the record owner of the roads, gates, open spaces, and common properties in the Sea Pines Plantation community and performs repairs necessary to maintain the attractiveness and value of the community and its properties. Before calling the referendum, CSA sought approval from a Resort representative, and the requested approval was given. The proposed amendment, if enacted, would create an “Infrastructure Improvement Fund” and impose an additional annual assessment of $600.00 upon residential property owners in Sea Pines Plantation, including plaintiff Jill K. Jinks (“Jinks”). The Infrastructure Improvement Fund would be “used only for the repair,

replacement, addition and improvement of the roads, bridges, bulkheads, leisure trails, storm water facilities and systems located in or servicing Sea Pines. . . .” ECF No. 38, Amend. Compl. ¶ 54. Under the 1974 Covenants, “Participating Property Owners” are entitled to vote on the referendum. A “Participating Property Owner” is defined under the 1974 Covenants as all those owners of Residential lots, and Family Dwelling Units, except the Company, who execute that certain Agreement, known as the ‘Advisory Group Agreement’, and all owners of Residential lots and Family Dwelling Units who purchase property in Sea Pines Plantation which is subject to the payment of the same or greater dollar amount of the assessments provided for herein. ECF No. 38-1 at 3. For the amendment to be approved, seventy-five percent of the Participating Property Owners who return a ballot must vote in favor of the amendment. The proposed amendment states that it is made by the Resort “with the acknowledgement of [CSA] and [ASPPPO].” Amend. Compl. ¶ 75. ASPPPO is a nonprofit corporation formed in 1973, whose stated mission is to provide a forum for and

to promote the common good and general welfare of residential property owners on Sea Pines Plantation and to represent residential property owners in all matters in pursuit of these objectives. On November 30, 2020, the ASPPPO board of directors held a special meeting adopting a resolution approving the proposed amendment to the 1974 Covenants. Following the passage of the resolution, ASPPPO encouraged its members to vote in favor of the referendum. Jinks, as a residential property owner in Sea Pines Plantation, objected to the referendum on the basis that none of the named defendants, including CSA, the Resort, or ASPPPO (collectively, “defendants”), had the authority to call for or pursue any

referendum to amend the 1974 Covenants. Despite Jinks’ objection, defendants moved forward with the referendum. At a CSA board of directors meeting held on January 28, 2021, the chair of the board advised that the referendum had passed. On January 13, 2021, one week before referendum ballots were due, Jinks filed the instant action, asserting (1) declaratory judgment claims against the Resort and CSA; (2) breach of contract claims against CSA and ASPPPO; and (3) civil conspiracy, nuisance, and permanent injunction claims against all defendants for their actions taken in connection with the referendum. In particular, Jinks seeks a declaration that defendants lacked the legal authority to call for the subject referendum or to implement the referendum and that the proposed amendment is invalid. On March 29, 2021, ASPPPO filed a motion to dismiss. ECF No. 44. On April 12, 2021, Jinks responded in opposition, ECF No. 51, and on April 19, 2021, ASPPPO replied, ECF No. 53. On June 30, 2021, Jinks filed a supplement to her response to the motion to dismiss, notifying the court of new authority on issues discussed in the parties’ briefings. ECF No. 70. On July

7, 2021, ASPPPO responded to Jinks’ supplemental filing. ECF No. 71. The court held a hearing on the motion to dismiss on September 28, 2021. ECF No. 73. As such, this motion has been fully briefed and is now ripe for review. II. STANDARD A Federal Rule of Civil Procedure 12(b)(6) motion for failure to state a claim upon which relief can be granted “challenges the legal sufficiency of a complaint.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (“A motion to dismiss under Rule 12(b)(6) . . . does not resolve contests surrounding the facts, the

merits of a claim, or the applicability of defenses.”). To be legally sufficient, a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). A Rule 12(b)(6) motion should not be granted unless it appears certain that the plaintiff can prove no set of facts that would support his claim and would entitle him to relief. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). When considering a Rule 12(b)(6) motion, the court should accept all well-pled allegations as true and should view the complaint in a light most favorable to the plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir. 1999); Mylan Labs., Inc., 7 F.3d at 1134. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

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