POLO GOLF and COUNTRY HOMEOWNERS ASSOCIATION, INC. v. CUNARD

306 Ga. 788

• Court: Supreme Court of Georgia
• Decided: September 23, 2019
• Docket: S19A0655
• Status: Published

Opinion

306 Ga. 788 FINAL COPY

S19A0655. POLO GOLF AND COUNTRY CLUB HOMEOWNERS ASSOCIATION, INC. v. CUNARD et al.

BENHAM, Justice.

Appellant Polo Golf and Country Club Homeowners

Association, Inc. (“PGHOA”) filed a complaint for declaratory and

injunctive relief against appellees John Cunard, Director of Forsyth

County’s Department of Engineering, and Benny Dempsey,

Stormwater Division Manager of Forsyth County’s Department of

Engineering (the “stormwater executives”), in their individual

capacities to determine their constitutional authority to

prospectively enforce an addendum to Forsyth County’s stormwater

ordinance.1 The stormwater executives filed a motion for judgment

on the pleadings, and all parties filed motions for summary

judgment. The trial court granted the motion for judgment on the

pleadings in favor of the stormwater executives, denying the

1 See Chapter 34, Article V of the Forsyth County Code of Ordinances. motions for summary judgment as moot.

According to the complaint filed in this matter and considered

by the trial court, PGHOA is a nonprofit corporation which oversees

a housing subdivision in unincorporated Forsyth County called “the

Polo Fields.” The stormwater mechanisms in the subdivision

including the Wellington Dam, which shores up a body of water

known as the Wellington Lake, are failing due to age. The failure of

these various stormwater mechanisms has caused flooding,

sinkholes, and other property damage for some individual

homeowners. This situation has resulted in almost a decade’s worth

of litigation, including a previous decision in this Court concerning

similar underlying facts and some of the same parties. See Polo Golf

and Country Club Homeowners’ Assoc., Inc. v. Rymer, 294 Ga. 489

(754 SE2d 42) (2014) (“Polo Golf I”). In Polo Golf I, John and Diane

Rymer, who were individual homeowners of the Polo Fields,

PGHOA, and Forsyth County disagreed as to who was responsible

for repairing failing stormwater mechanisms affecting the Rymers’

property pursuant to the 2004 version of Section 4.2.2 set forth in

2 Forsyth County’s Addendum to the Georgia Stormwater

Management Design Manual.2 The 2004 version of Section 4.2.2

provided in pertinent part as follows:

When a subdivision or industrial/commercial park has a legally created property or homeowners association, the association will be responsible for maintenance of all drainage easements and all stormwater facilities within the entire development. . . . Forsyth County Department of Engineering, Stormwater Division personnel may perform periodic inspections of existing and new private stormwater management facilities to determine whether they are maintained properly. Deficiencies will be noted to the association in writing. It shall be the responsibility of the association to repair deficiencies in a timely manner.

In Polo Golf I, PGHOA contended the 2004 version of Section 4.2.2

was unconstitutional; however, this Court did not reach the

constitutional issue in Polo Golf I because we concluded that the

provision applied to new developments and redevelopments, but not

to already-existing developments such as the Polo Fields. 294 Ga.

at 495.

2See Section 34-191 of Forsyth County’s Code of Ordinances.See also https://www.forsythco.com/Departments-Offices/Engineering/Stormwater- Division/Stormwater-Management (last accessed September 10, 2019).

3 In January 2014, while this Court’s decision in Polo Golf I was

still pending, Forsyth County enacted a new version of Section 4.2.2

which now states in pertinent part as follows:

When any subdivision or industrial/commercial park, whether new or existing, has a legally created property or homeowners association, the association will be responsible for maintenance of all drainage easements and all stormwater facilities within the entire development.

(Emphasis supplied.) It is this 2014 version of Section 4.2.2 that is

at issue in this appeal.

PGHOA argued below and continues to argue on appeal that

the 2014 version of Section 4.2.2 is unconstitutional because: (1) it

impairs PGHOA’s contractual obligations with homeowners

inasmuch as the 2014 version of Section 4.2.2 makes PGHOA

responsible for the maintenance of all stormwater mechanisms

within the subdivision and (2) it is retrospective in nature.

According to PGHOA’s complaint, the 2014 version of Section 4.2.2

precludes it from enforcing the Declaration of Covenants,

4 Restrictions and Easements (the “Declaration”),3 which requires

individual homeowners of the Polo Fields to maintain such drainage

and stormwater mechanisms. The trial court rejected these

constitutional challenges to the 2014 version of Section 4.2.2.

Because it determined that the 2014 version of Section 4.2.2 was

constitutional, the trial court concluded the stormwater executives

were immune from suit based on the doctrine of sovereign immunity

and granted the stormwater executives’ motion for judgment on the

pleadings. This appeal followed.

1. Preliminary Matters

a. The trial court ruled that granting the motion for judgment

on the pleadings was justified in part because it concluded sovereign

immunity applied after it first determined PGHOA’s private

contract-based constitutional claims were not viable. The trial

court’s analysis was incorrect. Sovereign immunity is a threshold

determination that must be ruled upon prior to the case moving

3 The Declaration was adopted and recorded in 1987.

5 forward on the more substantive matters. See McConnell v. Dept. of

Labor, 302 Ga. 18, 19 (805 SE2d 79) (2017) (“[T]he applicability of

sovereign immunity is a threshold determination, and, if it does

apply, a court lacks jurisdiction over the case and, concomitantly,

lacks authority to decide the merits of a claim that is barred.”).

Accordingly, the trial court erred when it did not make a ruling on

whether sovereign immunity applied before it considered more

substantive matters.

The trial court’s finding that sovereign immunity barred

PGHOA’s suit was also erroneous. As we stated in Lathrop v. Deal,

“the doctrine of sovereign immunity usually poses no bar to suits [for

prospective relief] in which state officers are sued in their individual

capacities for official acts that are alleged to be unconstitutional.”

301 Ga. 408 (III) (C) (801 SE2d 867) (2017). Here, PGHOA sued the

stormwater executives in their individual capacities for prospective

relief from acts which PGHOA alleged were unconstitutional.

Accordingly, the suit was not barred by sovereign immunity. Id.

Therefore, the portion of the trial court’s judgment dismissing the

6 case on sovereign immunity grounds is reversed.

b. The stormwater executives’ argument that PGHOA lacks

standing is incorrect. The stormwater executives allege the

dismissal of the suit was authorized because PGHOA lacks

standing, inasmuch as the stormwater executives have not taken

any enforcement actions against PGHOA for the failing stormwater

mechanisms at the Polo Fields. However, “a party has standing to

pursue a declaratory action where the threat of an injury in fact is

‘actual and imminent, not conjectural or hypothetical.’ [Cit.].”

Women’s Surgical Center, LLC v. Berry, 302 Ga. 349 (1) (806 SE2d

606) (2017). Forsyth County enacted the 2014 version of Section

4.2.2 while this Court’s decision in Polo Golf I was pending. In Polo

Golf I, Forsyth County, through its counsel — who also represents

the stormwater executives in this case — filed a motion for

reconsideration in which it stated its intent to enforce the 2014

version of 4.2.2 against PGHOA. During the oral argument in this

appeal, counsel for the stormwater executives admitted that the

stormwater executives would be the county personnel who would

7 enforce Section 4.2.2 against PGHOA. Thus the enforcement of

Section 4.2.2 is imminent in these circumstances and not merely

conjectural or hypothetical, meaning that PGHOA does not lack

standing. See id. at 351.

2. Motion for Judgment on the Pleadings

Our review of a trial court’s decision on a motion for judgment

on the pleadings is de novo. See Reliance Equities, LLC v. Lanier 5,

LLC, 299 Ga. 891 (1) (792 SE2d 680) (2016). When considering such

motions,

all well-pleaded material allegations of the opposing party’s pleading are to be taken as true, and all allegations of the moving party which have been denied are taken as false. A motion for judgment on the pleadings should be granted only if the moving party is clearly entitled to judgment.

(Citations and punctuation omitted.) Sherman v. Fulton County Bd.

of Assessors, 288 Ga. 88, 90 (701 SE2d 472) (2010). See also Trop,

Inc. v. City of Brookhaven, 296 Ga. 85 (1) (764 SE2d 398) (2014). For

the reasons set forth below, we affirm the trial court’s grant of the

motion for judgment on the pleadings based on the constitutional

8 issues concerning PGHOA’s contract rights.

a. The trial court concluded that the 2014 version of Section

4.2.2 does not violate the federal constitution’s Contracts Clause.4

To determine whether a law unconstitutionally impairs a

contractual relationship under the Contracts Clause, a court

considers, at the first level of its inquiry, the following: whether a

contractual relationship exists, whether the change in law impairs

the contractual relationship, and whether the impairment is

substantial. See Taylor v. City of Gadsden, 767 F3d 1124 (III) (B)

(11th Cir. 2014) (citing Allied Structural Steel Co. v. Spannaus, 438

U. S. 234, 244 (98 SCt 2716, 57 LE2d 727) (1978) and Gen. Motors

Corp. v. Romein, 503 U.S. 181, 186 (112 SCt 1105, 117 LE2d 328)

(1992)). See also Sveen v. Melin, __ U. S. __ (II) (138 SCt 1815, 201

LE2d 180) (2018) (discussing the test for a violation of the Contracts

Clause). Even if a law causes a substantial impairment to a

4 The federal constitution provides in pertinent part: “No State shall . . .

pass any . . . [l]aw impairing the [o]bligation of [c]ontracts . . . .” U. S. Const. Art. I, Sec. X.

9 contractual relationship, a second level of inquiry requires a trial

court to consider whether the law nonetheless is a reasonable way

to advance a significant and legitimate public purpose. See Sveen,

138 SCt at 1822.

The 2014 version of Section 4.2.2 states that homeowner

associations (“HOAs”) are responsible for maintaining all drainage

easements and stormwater facilities in their developments. The

2014 version of Section 4.2.2 further provides that the county, in

certain circumstances, may direct HOAs to take certain actions (e.g.,

applying larvicides or making repairs) to comply with their overall

responsibility to maintain such systems or otherwise be penalized

for noncompliance.5 On its face, the 2014 version of Section 4.2.2

does not mention or prescribe the means by which an HOA must

meet its responsibility to maintain drainage easements or

stormwater facilities. It also does not expressly or implicitly

prohibit an HOA from using its contractual relationships with

5 See also Section 34-195 of Forsyth County’s Code of Ordinances.

10 homeowners to effect compliance therewith.

In the complaint, PGHOA concedes it can exercise at least one

of its contractual remedies under the Declaration (i.e.,

abatement/self-help) against homeowners to meet its obligations to

the county. Thus, the 2014 version of Section 4.2.2 does not wholly

preclude PGHOA from using the Declaration to effect action by

homeowners in order to comply with the county’s stormwater

maintenance requirements. As to the other contractual remedies

available under the Declaration,6 PGHOA has only identified

impediments to its exercise of these remedies, such as the vagaries

of dealing with time constraints, the bureaucracy of its

administrative board, and difficult homeowners. PGHOA has not

shown any actual inability to exercise its contractual remedies

because of the county’s stormwater ordinance. Accordingly, there is

no violation of the Contracts Clause.

6 In its complaint, PGHOA alleges that, when homeowners fail to comply

with their obligations under the Declaration, it may remedy such noncompliance by fining homeowners, suspending homeowners’ membership privileges, and/or suing homeowners.

11 b. PGHOA alleges the 2014 version of Section 4.2.2 violates

Georgia’s impairment clause because it impairs an obligation of

contract and is retrospective in nature, thereby violating Georgia’s

prohibition against retroactive laws. See Ga. Const. of 1983, Art. I,

Sec. I, Par. X (“No . . . retroactive law, or laws impairing the

obligation of contract . . . shall be passed.”). Establishing a violation

of Georgia’s impairment clause, under either a theory of contractual

impairment or a theory of retroactivity, requires the complaining

party to show that a vested right is at stake. See Deal v. Coleman,

294 Ga. 170 (2) (a) (751 SE2d 337) (2013) (“with respect to the

retroactive application of statutes, we conclude that ‘vested rights’

must be private rights”);7 Unified Government of Athens-Clarke

County v. McCrary, 280 Ga. 901, 904 (635 SE2d 150) (2006) (no

impairment of employment contract where retirees did not have a

“vested right” in the precise type of healthcare delivery system used

7 This Court has explained that “[p]rivate rights may become vested in

particular persons, and when they are vested, [the Georgia] Constitution does not permit those rights to be denied to those persons by subsequent legislation.” Id. at 181.

12 during employment); Siegrest v. Iwuagwa, 229 Ga. App. 508 (3) (c)

(494 SE2d 180) (1998) (chiropractor had no vested right to perform

massages as part of treatment and so statute that excluded

massages from chiropractor services did not impair any contractual

right). To determine whether there has been a violation of Georgia’s

impairment clause, courts in this state will consider whether a

vested right exists and then whether that vested right has been

“injuriously affected” by the law in question. See Jackson County

Bd. of Health v. Fugett Constr., Inc., 270 Ga. 667 (2) (514 SE2d 28)

(1999).

Here, PGHOA has failed to fully articulate a vested right8 or

8 This Court has explained:

To be vested, in its accurate legal sense, a right must be complete and consummated, and one of which the person to whom it belongs cannot be divested without his consent. A divestible right is never, in a strict sense, a vested right. It has also been said that the term vested rights, which cannot be interfered with by retrospective laws, means interests which it is proper for the state to recognize and protect and of which the individual cannot be deprived arbitrarily without injustice.

(Citation and punctuation omitted). Hayes v. Howell, 251 Ga. 580 (2) (b) (308 SE2d 170 (1983). 13 show that any alleged vested right has been injuriously affected by

the 2014 version of Section 4.2.2. In its briefing on appeal, PGHOA

contends all the rights in the Declaration are vested rights and,

without citing any authority, contends that “maintenance

obligations” are “fully vested contract rights.” As discussed in

Division 2 (a), supra, the 2014 version of Section 4.2.2 does not

prohibit PGHOA from exercising all of its remedies for addressing

homeowners’ noncompliance with their stormwater maintenance

obligations under the Declaration. In the absence of a vested right,

or an injury thereto, there is no violation of the Georgia

Constitution’s impairment clause.

Inasmuch as the 2014 version of Section 4.2.2 is not

unconstitutional under the Contracts Clause or Georgia’s

impairment clause, the trial court’s decision to grant the stormwater

executives’ motion for judgment on the pleadings must be affirmed

as to those grounds.

3. The trial court did not address PGHOA’s various other

claims, including trespass and involuntary servitude. Inasmuch as

14 those issues were not ruled upon, we will not address them. See

Messaadi v. Messaadi, 282 Ga. 126 (3) (646 SE2d 230) (2007);

Ballard v. Waites, 194 Ga. 427 (5) (21 SE2d 848) (1942). Therefore,

the case is remanded for the trial court to address those claims in

order to fully resolve the stormwater executives’ motion for

judgment on the pleadings.

Judgment affirmed in part and reversed in part, and case

remanded. All the Justices concur.

DECIDED SEPTEMBER 23, 2019. County ordinance; constitutional question. Forsyth Superior Court. Before Judge Bagley.

15 Lueder, Larkin & Hunter, John T. Lueder, for appellant. Jarrard & Davis, Kenneth E. Jarrard, Joseph P. Mitchell, for appellees.