Court Opinion

ID: 2744006
Source: CourtListenerOpinion
Date Created: 2014-10-21 12:04:46.820337+00
Date Added: 2024-06-11T09:29:14.373169
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute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).