Willowmere Cmty. Ass'n, Inc. v. City of Hous.

792 S.E.2d 805, 250 N.C. App. 292, 2016 N.C. App. LEXIS 1105
CourtCourt of Appeals of North Carolina
DecidedNovember 1, 2016
Docket15-977
StatusPublished
Cited by7 cases

This text of 792 S.E.2d 805 (Willowmere Cmty. Ass'n, Inc. v. City of Hous.) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Willowmere Cmty. Ass'n, Inc. v. City of Hous., 792 S.E.2d 805, 250 N.C. App. 292, 2016 N.C. App. LEXIS 1105 (N.C. Ct. App. 2016).

Opinions

STROUD, Judge.

*292Plaintiffs appeal the trial court's order allowing defendants' motion for summary judgment. The trial court correctly granted summary judgment dismissing plaintiffs' lawsuit based upon lack of standing to file the *293suit because neither plaintiff complied with their respective bylaws to authorize initiating litigation.

I. Background

In September of 2013, defendant Charlotte-Mecklenburg Housing Partnership, Inc. ("CMHP") sought and obtained rezoning of about 7.23 acres abutting portions of the residential subdivisions represented by plaintiffs Willowmere Community Association, Inc. ("Willowmere") and Nottingham Owners Association, *807Inc. ("Nottingham") (collectively "plaintiff HOAs"). Defendant CMHP planned to develop up to 70 multifamily housing units on the property which had been previously approved for development as a child care center. The rezoning was hotly contested by local residents and plaintiffs at the public hearing in December of 2013, but ultimately the City Council approved the rezoning application. Plaintiffs then filed this lawsuit challenging the rezoning. This appeal does not involve the substance of plaintiffs' challenges to the propriety of the rezoning but only plaintiffs' legal standing to bring the claim, so we will address only the relevant background regarding the issues before this Court.

In October of 2014, plaintiff HOAs requested summary judgment in the action they had brought against defendants. Later in October, defendant CMHP filed a cross-motion for summary judgment. In November of 2014, defendant City also filed a cross-motion for summary judgment.

After a two-day hearing on the summary judgment motions, the trial court entered an order in April of 2015 agreeing with all the parties "that there is no genuine issue of material fact" and ultimately resolving the legal issue of standing in favor of defendants, determining that plaintiffs did not have standing to bring the action because "they failed to follow the requirements in their respective bylaws with regard to their decisions to initiate this litigation." Though findings of fact are not required in a summary judgment order, see generally N.C. Gen. Stat. § 1A-1, Rule 56(c) (2013), the trial court made 14 findings of fact "[i]n order to explain the Court's reasoning in reaching its conclusion[.]" The trial court noted the findings it had made were uncontested, including:

2. Willowmere admitted, in the deposition of its corporate representative, Michael J. Kelley, that its Board of Directors decided to initiate the lawsuit without a formal meeting. Willowmere produced an email string among the directors that it claimed was sufficient to serve as written consent to action outside a meeting under Article III, Section 18 of its bylaws.
*2943. An email consent of this type is not expressly authorized by Willowmere's bylaws to satisfy the requirement of written consent, signed by all of the Directors of Willowmere.
4. Although N.C.G.S. § 55A-1-70 permits North Carolina non-profit corporations to agree to conduct transactions through electronic means, the undisputed evidence is that Willowmere has not taken any action permitting it to invoke this statute. Consequently, there is no authorization for the email string to serve as a written consent to action without a formal meeting.
5. It follows that Willowmere did not act in accordance with its bylaws with regard to its decision to initiate this litigation. Therefore, Willowmere lacks standing.
6. To establish the propriety of the decision by Nottingham to initiate this lawsuit, Nottingham relies on the deposition testimony of its representative, Mr. Kenneth S. Anthonis, who testified that he had a telephone conversation with at least one other director. The record does not reveal a meeting with a quorum of directors present either in person or by phone at which the filing of the litigation was authorized. The record also does not reveal that the Board filed written consents or minutes reflecting the proceedings of the Board, nor that the Board posted the explanation of the action taken within three (3) days after the written consents of the Board were obtained, as required under Article 5, Section 5 of Nottingham's Bylaws.
7. Mr. Anthonis testified in his deposition, as the corporate representative of Nottingham, that there had been no formal meeting of the Nottingham Board of Directors at any time to decide to file this lawsuit. In his deposition transcript, Mr. Anthonis stated affirmatively that there were no written consents or minutes memorializing the decision to proceed with the lawsuit.
8. The failure to comply with Article 5, Section 5 of Nottingham's bylaws concerning *808action by directors taken without a meeting, discussed above with respect to Willowmere, is also present for Nottingham, which, therefore, also lacks standing. *2959. While Plaintiffs' bylaws each permit their directors to sue regarding matters affecting their planned communities, the directors can only act through a meeting or a consent action without a meeting. Neither Willowmere nor Nottingham has met their burden to show that their directors acted to initiate this litigation through one of these means in this case.
10. Defendants' arguments regarding Plaintiffs' standing present a challenge to the jurisdiction of the Court. Under N.C. Rule 12(h)(3), a challenge to jurisdiction may be brought at any time.
11. For the reasons discussed above, the Court concludes that Plaintiffs lack standing, and consequently that the Court lacks jurisdiction to hear their challenge to Ordinance 5289-Z adopted by the City.

Plaintiffs appeal.

II. Standing

The only issue before this Court on appeal is regarding whether plaintiffs have standing to bring this action; none of the underlying issues which led to this action are before this Court. Plaintiffs make three arguments regarding standing: (1) defendants do not have standing to challenge plaintiffs' standing on the basis asserted; (2) plaintiffs have standing because they complied with their bylaws in approving filing the lawsuit; and (3) even if they failed to comply with their bylaws, these violations are non-jurisdictional, and thus they still have standing.

A. Raising the Issue of Standing

Plaintiffs first contend that "defendants lack both statutory standing to challenge the validity of the associations' actions, and contractual standing to enforce the associations' bylaws." (Original in all caps.) Essentially plaintiffs contend that since defendants are not parties to the bylaws, they do not have standing to raise a standing issue based upon any alleged violation of plaintiffs' bylaws.

Standing is a necessary prerequisite to a court's proper exercise of subject matter jurisdiction.

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Bluebook (online)
792 S.E.2d 805, 250 N.C. App. 292, 2016 N.C. App. LEXIS 1105, Counsel Stack Legal Research, https://law.counselstack.com/opinion/willowmere-cmty-assn-inc-v-city-of-hous-ncctapp-2016.