### IN THE COURT OF APP EALS OF TENNESS EE AT JAC KSON Fe bruary 21, 200 8 S es sio n CORDOVA THE TOW N HOMEO WNERS ASS OCI ATI ON, INC. v. GI LL DEVEL OPMENT COMPANY, INC. Appeal from the Chancery Court for Shelby Coun ty No. CH-04-1297- 2 Arnold B. G oldin , Chancellor

No. W2007-01692-C OA-R3-C V - Filed September 12, 2008

This appea l involves the interpre tation of a de clar ation of covenants for a homeowners’ a ssociation. The de clar ation made the de veloper a member

of t h e h o meowner s’ association, insofar as the de ve lop e r o wn e d lo ts within the de ve lop me nt. It a lso state d tha t the ob lig a tio n to pay a sse ssm e nts on a giv e n lo t di d n ot b e ginun til e ith e r the lot wa s tra ns fe rr e d fr om the de ve lop e r o r i mpr ov e me nts on the lot were completed, whic h ev er o cc urre d first. The homeow ners’ association sued the develope r, see king damages f or unpaid a ssessments on lots o wn ed by the deve loper, on whic h improvements wer e not complete. T he trial court grante d the m otion for summary judgment f iled by the homeowne rs’ association. The develope r appe als. We reve rse, c oncluding that the decla ration of c ov en ants provides that the obligation to pay a ssessments on the lots owned by the develope r had not ye t commence d. Tenn. R. App . P. 3 Appeal as of Right; Judgment of the Chancer y Court Re verse d and Remanded
H OL LY M. K I RBY , J., delivere d the opi nion of the Court, in which A LA N E. H I G H ERS , P.J., W.S., and D AVI D R. F ARMER , J., joined.
John J. Heflin II I, Memphis, Tenne ssee, f or the a ppellant Gill Development Company, Inc

. John H. Dotson, Memphis, Tennesse e, for the appe llee Cordo v a

th eT o w nH o me o w n e r s A ssociation, Inc.
OP IN ION Plaintiff/Appellant Cordova the Town Homeowne rs Association, Inc. (“the As s ociation”) is a Tenne ssee non- profit, non-stock co rp oration with its principal place of business in Cordova, Tenne ssee. I t is the homeowners a ssociation for a planned r esidenti al d ev el o p m ent known as Cordova the Tow n (“the Deve lopme n t ”)

. Defendant/Appe llee Gill Deve lopment Company, Inc. (“G ill Development”) is a Tenne ssee c orporation, also in Cordova, Tennesse e. Gill Development develope d Cordova the Tow n and incor porate d the Association.The w or d “ i m pr ovem ent s ” i s de fi ned i n t he D ec l ar at i on as “t he s t r uct ur es , w al l s , pave m ent s , pl ant i ngs , a nd 1

o th e r a d d iti o n s b u ilt o r p la c e d o n th e L o ts.” -2- On April 11, 1995, af

ter forming and incorporating the Association, Gill Development exec uted the De cla ration of Covenants, Condit ions and Restrictions for Cordova the Town Homeowne rs Association, Inc . (“D ecla ration”)

. Under

the Dec laration, the Association was given theautho ri ty to e nf

or c e the De ve lop me nt’ s c ov e na nts a ndc on dit ion s, a ndto c oll e c t a nddis bu rs e re gu lar a sse ssm e nts . G ill De ve lop me nt, ins of ar a s it ow ne d lo ts w ith in the De velop men t, he ld membership in the Association. As such, it was requir ed to pay r egular assessments to the Association under

the terms of the Dec laration.
Gi ll D e ve lop me nt’ s o bli gatio n to pay a sse ssm e nts to the As so c ia tio n is se t f orth i n A rt ic le IX, sec tion 1 of the Dec laration, which ref ers to Gill De velopment as the “ Dec larant.” This section of the De clar ation describes the various assessments due:
The De clar ant, for e ach L ot owned within the Property, he reby covenants and agre es to pay to the Association, and eac h Owner of a Lot, by ac cepta nce of a dee d there for . . . is deemed to c ovenant a nd agre e to pay to the Ass o ci at i o n (1) r egular Assessments or cha

rges, to be collected either monthly, quarterly, or annua lly as the Association shall determine in its reasonable discretion, (2) specia l Assessments for capital I mprovements or othe r purpose s . . ., and (3) emer gency Assessments as may be de c lare d b y th e Boa

rdof Di re c tor s.
The Assoc iation, in its discretion, chose to levy assessments on a quarterly basis. Article IX, sec tion 8 of the De clar ation provides the date on which the obligation to pay asse ssments commence s for e a c h lo t:
The re gular Asse ssments provided for here in shall commence as t o eac h Lot on the firs t d ay of the month following the transfer from De clar ant or c ompletion of Improveme nts thereon, whic hever shall first occur

. 1 The issue in this appea l center s on the interpre tation of these two pr ovisions of the Dec laration.
The De velopment is comprised of 107 residential lots. As of July 1, 2004, Gill Development owned 54 of

the 107 lots. On that date, the A ssociation filed t his lawsuit against Gill Development in the Chance ry Court for Shelby County, seeking damage s for unpaid assessments. The c omplaint a lle ge d that, be tw e e n 20 01 a nd 20 04 , G ill De ve lop me nt h a d f a ile d to pay a sse ssm e nts on the 54 lot s that it sti ll o wn e d, a s w e ll a s o n 4 oth e r l ots that it so ld b e fo rec omm e nc e me nt of the a c tio n. InGi ll Deve lopment’s answe r, it admitted that it did not pay the assessments in que stion, but asse rted that it was under no obligation to do so.O n t he 4 l ot s t hat G i l l D eve l opm ent ha d t r ans f er r ed, t he A s s oci at i on s ought as s es s m ent s up t o t he dat e of t he 2
t ransfer.

The par t i es s t i pul at ed t hat t he A s s oci at i on w oul d be a w ar ded $109, 662. 43 f or unpa i d a s s es s m ent s , $24, 000

3 i n a t t or ney’ s f ee s , and agr ee d on a f or m ul a f or t he det er m i nat i on of pr ej udgm ent i nt er es t

. They al s o s t i pul at ed t hat t he
a c c u ra c y o f th e a m o u n t o f th e a sse ssm e n ts w o u ld n o t b e c h a llen g e d o n a p p e a l. -3- Sub se qu e ntl y, theAs so c ia tio n mo ve d f or pa rt ia l su mma

ry jud gme nt o n th e iss ue of Gi ll Deve lopment’s liability for unpaid assessments on 54 lots that it still owned and the 4 l ots that were transfe rre d befor e the c omplaint was filed. 2 In support of its response to the Association’s summary judgment motion, Gill Development filed the a ffidavit of its pre sident, Raymond B. Gill III (“G ill”). In hi s aff idavit, Gill admitted that Gill Development onceowned or still owned the lots on which asse ssments were being sought, but state d th a t th e impr ov e me nts ontho se lot s h a d n ot b e e n c omp le te d. Con se qu e ntl y, Gi ll De ve lop me nt m a int a ine d th a t it wa s n ot u nd e r an o bli gatio n to pay a ny a sse ssm e nts

. The trial c ourt grante d the Association’s motion for pa rtial summary judgment, holding that the Association wa s en t itled to judgment as a matter of law on the issue of

Gill Development’s liability for the assessments sought. It also awa rded pr ejudgment intere st and attorney’ s fee s to the As so c iatio n. In its or de r, the tr ia l c ou rt a dd e d: “ Th e Cou rt fu rthe r a nd sp e c if ic a lly fi nd s th a t [ Gi ll Deve lopment], as an ow ner of property in the [ Deve lopment], and as a member of the Association, is obligated to pay regula r asse ssments jus t as other owne rs and membe rs.” The trial court then order ed that a w rit of inquiry be he ld to determine the amount of damage s due.
After the gra nt of partial summary judg me nt in favor of the Association, the pa

rties stipulated to the amount of dama ges and attorney’s fe es. On July 13 , 2 0 0 7 , t h e t rial court approve d the 3 sti pu latio n, makin g th e jud gme nt i n f a vo r o f the As so c ia tio n f

ina l. G ill De ve lop me nt the n f ile d th is app e a l. On appe al, Gill Deve lopment raises one issue: whether the trial court corre ctly interpre ted the Dec laration in holdi ng Gill Development liable f or re gular a ssessments on lots that it owned on which the improve ments had not bee n completed. Summary judgment should be granted w hen the moving party demonstrates an absenc e of any material fac tual dispute, and t hat t he movant is entitled to judgment as a matter of law . Tenn. R. Civ. P . 56.04. As o nly legal issues arein dispute, we re view the lowe r court’s grant of the su mma ry jud gme nt de novo on the record with no presumption of corre ctness. Bain v . W e lls , 936 S.W.2d 618, 622 (Tenn. 1997)

. On app e a l, Gil l De ve lop me nt ar gu e s tha t the la ng ua ge of theDe c laratio n is un a mbi gu ou s. Focusing on article I X, sec tion 8 of the Dec laration, set forth above, Gill Deve lopment asserts thatS ee su p ra not e 1. 4

The A s s oci at i on a r gues t ange nt i al l y t hat t he t er m s of t he D ec l ar at i on a r e am bi guous be ca us e i t s i nt er pr et at i on 5 of t he D ec l ar at i on di f f er s f r om t hat of

G i l l D eve l opm ent
.

-4- it is not require d to pay assessments on the lots that it owns until the improvements on such lots are completed. 4

Inre sp on se , th e As so c ia tio n, arg ue s th a t se c tio n 8 c a nn ot be ha rm on iou sly int e rp re te d w ith the other pr ovisions in the Declaration, and that section 8 is in fact repugnant to the provisions in t he Dec laration, because Gill Deve l o p m en t i s a member of the Assoc iation and is require d to pay regula r asse ssments. The Association maintains that Gill Development should be re quired to pay

5
re gu lar a sse ssm e nts in t

he sa me way a s th e oth e r me mbe rs of the As so c ia tio n: on the ba sis of lot s owned, r egar dless of the whe ther the improve ments have be en complete d.
Resolution of this dispute require s interpre tation of the terms of the Dec larat i o n
. At t he outset, we note that our construction of t he Declar ation must procee d as would construc tion of any other written agre ement. Se e Ma ple s Ho me owne rs A ss’ n, I nc . v . T & R N as hv ill e Lt d. P’ship , 993 S.W.2d 36, 38-39 (Tenn. Ct. App. 1998) (citations om itted). Acc ordingly, our first conce rn is the contra cting parties’ mutual intent. Petty v . Sloan , 277 S.W.2 d 355, 360 (Tenn. 1955) . If we find the Dec laration to be unambiguous as it is written, the intention of the parties will be de termined by t h e De cl ar at i on’s plain meaning. Id. a t 3 5 8

. I f a mate r ia l p ar t o f th e D e c la r a ti o n ap p e ar s to be ambiguous, we look to extrinsic e vidence . The a mbigu i t y may be r esolved a gainst the party who draf ted the Dec laration. Nat’l Garage Co. v. G eorge H. McFadde n & B rother, In c. , 542 S.W.2d 37 1, 37 4 (T e nn . Ct. App . 197 5) (c itatio ns omi tte d) ; Maxwell v . Land Deve lopers, Inc. , 485 S.W.2d 86 9, 87 4 ( Te nn . Ct . A pp . 1 97 2) ; se e als o O pr y lan d Ho te l, L.P

. v . M ill br oo k D ist rib utio n Se rv ic e s, Inc. , No. 01A01-9810- CH-00551, 1999 WL 767816, at *6 (Tenn. Ct. App. Sept. 29, 1999).
Un de r a rt ic le IX , s e c tio n 1 , th e pa

rt ie s bind the mse lve s to the ob lig a tio ns c re a te d b y th e te rm s of the De clar ation. All me mbers of the Assoc iation, including Gill Development, are require d to pay re gu lar a sse ssm e nts . A ll m e mbe rs are re qu ir e d to pay s uc h a sse ssm e nts “ fo r ea c h Lot ow ne d” wi thi n the Deve lopment, with o u t m en t i o n of improvements. The Association would have section 1 enfor ced w ithout refer enceto the rema inder of the Dec laration. This we decline to do.
Artic le , I X, se c tio n 8 , o f the De c larati on ackn owle dg e s th e e xis te nc e of the me mbe rs ’ obligation to pay regular assessments, and unambiguously st ates the point in time at which that ob lig a tio n b e gin s. Insh ort, i t pr ov ide s when the obligation commence s. Under se ction 8, regula r assessments on lots within the Development ar e not due until “the first day of the month following the tr a ns fe r fr om [ Gi ll D e ve lop me nt] or c omp le tio n o f I mpr ov e me nts the re on , w hic he ve r s ha ll f ir st occur .” The interpre tation advocated by the Association, and adopted by the t rial court, in essence nullifies section 8. Section 8 of the De clar ation, howeve r, can be interpre ted consonantly with the other provisions; conseque ntly, we are not at liberty to excise it fr om the document. See Associated Press v. WGN

S, In c. , 348 S.W.2d 507, 512 (Tenn. Ct. App. 1961).-5-

It is u nd isp ute d that the l ots fo r w hic h th e a sse ssm e nts areso ug ht a reow ne d b y G ill Deve lopment or wer e owne d by Gill Development at one time. It i s al s o u n disputed that the improvements on those lots were incomplete at the t ime when the assessments we re a llegedly due. Acc ordingly, Gill Development’s obligation to pay assessments had not yet commence d. There fore , we mustconclude that the Association’s motion for pa rtial summary judgment should have be en denied.
The de cision of the trial c ourt is reve rsed, a nd the cause re manded for f urther pr ocee dings consistent with this Opini on. Costs on appeal ar e taxe d t o the Appellee , Cordova the Tow n Homeowne rs Association, Inc ., for whic h exec ution may issue if nece ssary.

___________________________________ HOLLY M. K IRBY, JUDGE