Court Opinion

ID: 4036354
Source: CourtListenerOpinion
Date Created: 2016-09-22 20:09:54.57517+00
Date Added: 2024-06-11T14:49:46.751591
License: Public Domain

SECOND DIVISION
                                BARNES, P. J.,
                            BOGGS and RICKMAN, JJ.

                    NOTICE: Motions for reconsideration must be
                    physically received in our clerk’s office within ten
                    days of the date of decision to be deemed timely filed.
                                http://www.gaappeals.us/rules

                                                                  September 14, 2016

In the Court of Appeals of Georgia
 A16A0826. LEND A HAND CHARITY, INC. et al. v. THE FORD
     PLANTATION CLUB, INC.

      BOGGS, Judge.

      Lend A Hand Charity, Inc. appeals from the trial court’s order finding it liable

to the Ford Plantation Association, Inc. (“the Association”) for assessments, charges,

and interest. Lend A Hand and Kethesparan Srikanthan (collectively “appellants”)

appeal from the trial court’s conclusion in the same order that they are liable to the

Ford Plantation Club, Inc. (“the Club”) for past due assessments, charges, and

interest. Appellants contend that the trial court erred by (1) failing to permit them “to

present evidence on questions of fact”; (2) failing to void the “Club’s Declaration as

a collateral or personal covenant which did not run with the land, and thus an
adhesive contract voidable by Appellants”; and (3) awarding interest to the Club at

a rate of 18%. For the reasons explained below, we affirm in part and vacate in part.

      1. In their first enumeration of error, appellants assert that the trial court erred

by failing to permit them to present evidence on questions of fact, but they point to

no place in the record where the trial court took any such action.1 “This is a court for

the correction of errors of law made by the trial courts, and an error of law has as its

basis a specific ruling made by the trial court. In the absence of such a specific ruling,

there is nothing for us to review.” (Citations and punctuation omitted.) Howell v.

Beauly, Inc., Ga. App. (2) (Case No. A16A0327, decided July 12, 2016).

      2. Appellants also assert that the trial court erred by “failing to void Appellee

Club’s Declaration as a collateral or personal covenant which did not run with the

land, and thus an adhesive contract voidable by Appellants.”

      (a) To the extent appellants claim the trial court erred by failing to affirmatively

void the Club Declaration, we cannot review it because the record before us does not

include such a request. Id.

      1
        We note that the record before us does not include a transcript of the motion
hearing and that appellants requested that no transcripts be included in the record on
appeal.

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      (b) To the extent appellants are asserting that the trial court erred by implicitly

concluding that the club covenant ran with the land, we disagree.

      The record shows that on January 4, 2011, Lend A Hand Charity, Inc. received

Lot 275 in the Ford Plantation subdivision by gift deed. In 1998, the developer/owner

of the Ford Plantation subdivision filed a “Declaration of Covenants, Conditions, and

Restrictions” for the subdivision. The preamble of the Declaration states: “Declarant

hereby declares that all of the property . . . shall be held, sold, used and conveyed

subject to the following easements, restrictions, covenants, and conditions, which

shall run with the title to the real property subjected to this Declaration.” Article 3 of

Declaration, titled “Membership and Voting Rights,” provides:

      Every Owner shall be a Member of the [Ford Plantation] Association .
      . . . The membership rights of an Owner which is not a natural person
      may be exercised by any officer, director, manager, partner or trustee of
      such Owner, or by any individual designated from time to time by the
      Owner in a written instrument provided to the secretary of the
      Association.

 The Declaration further provided that the Association was responsible for

“management, maintenance, operation and control” of common areas of the

subdivision and that the cost of maintenance and repair of the common areas would

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be a common expense allocated among all units in the subdivision. In the

“Assessments” section, the declaration authorized the Association to collect

assessments. Additionally,

      Each Owner, by accepting a deed or entering into a contract of sale for
      any portion of the Properties, is deemed to covenant and agree to pay
      these assessments.

                                           ...

      No Owner may exempt himself or herself from liability for assessments
      by non-use of Common Area . . . , abandonment of his or her Unit, or
      any other means. The obligation to pay assessments is a separate and
      independent covenant on the part of each Owner.

Following other articles governing matters such as architectural standards, use

restrictions, easements, and mortgagee provisions, the Declaration contains an article

governing the Club. This article states:

      Neither membership in the Association nor ownership or occupancy of
      a Unit shall confer any ownership interest in or right to use the Club.
      Rights to use the Club will be granted only to such persons, and on such
      terms and conditions, as may be determined from time to time by the
      Club, subject to the terms of the Club membership agreements.

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      Approximately two months after filing the general “Declaration of Covenants,

Conditions, and Restrictions,” the same owner/developer filed a Club Declaration for

the subdivision. Its purpose, as stated in the preamble, follows:

             Declarant is the current owner and developer of that certain gated
      community . . . known as The Ford Plantation. . . . Declarant is also the
      owner of certain real property and improvements located within the
      Plantation which will be conveyed to The Ford Plantation Club, Inc. . .
      . and operated as a private, equity ownership, social and recreational
      club . . .

             In establishing the Plantation, Declarant intends to create an
      exclusive residential community with social and recreational facilities.
      It is the goal of the Declarant that the Club Facilities be utilized
      predominantly by homeowners in the Plantation and their families to
      maintain the concepts of exclusivity and community.

             In order to ensure that membership remains predominantly with
      the homeowners in the Plantation, the Declarant is requiring that all
      purchasers of residences and/or residential lots in the Plantation apply
      for membership in the Club, and if approved, become members of the
      Club . . . This Club Declaration shall run with title to and shall be
      binding on all Persons having any right, title, or interest in all or any
      portion of such real property . . . and shall inure to the benefit of each
      and every owner of all or any portion thereof.

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According to the Club’s bylaws, it operates “a private fishing, golf, equestrian, tennis,

swimming and socially oriented club of uniformly high quality.” The Club

Declaration requires all owners to apply for membership and authorized the Club to

levy assessments against lot owners. Additionally,

      No Owner of Member may waive or otherwise exempt himself or herself
      from liability for Assessments. By way of illustration and not limitation,
      there shall be no waiver or exemption of Assessments due to non-use of
      the Club Facilities, failure to submit a Membership Application, or
      abandonment of the Lot. The obligation to pay the Assessments is a
      separate and independent covenant on the part of each Owner.”

Pursuant to a Fifth Amendment to the Club Declaration filed on April 23, 2003, no

assessments could be levied against any owner whose membership application was

not approved by the Club.

      Based on the above, the trial court did not err by implicitly concluding that the

Club Declaration ran with the land and was binding against subsequent lot owners.

      Covenants relating to land, or its mode of use or enjoyment, are
      enforceable against subsequent grantees with notice, whether named in
      the instrument or not, and though there is no privity of estate. It is
      immaterial in such cases whether the covenant runs with the land or not,
      the general rule being that it will be enforced according to the intention
      of the parties. It is only necessary that the covenant concern the land or

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      its use, and that the subsequent grantee has notice of it. Covenants are
      so enforced on the principle of preventing a party having knowledge of
      the just rights of another from defeating such rights.

Timberstone Homeowner’s Assoc. v. Summerlin, 266 Ga. 322, 323 (467 SE2d 330)

(1996). The Georgia Supreme has previously recognized that a deed provision

regarding a recreational club, similar to the declaration filed here, concerned the land

or its use and created a covenant running with the land binding on a subsequent

grantee upon acceptance of the deed. Lowry v. Norris Lake Shores Dev. Corp., 231

Ga. 549 (203 SE2d 171) (1974). We see no reason to reach a contrary result here.

      3. In their remaining enumeration of error, appellants contend that the trial

court erred by awarding the Club interest at a rate of 18%. Based upon this court’s

recent decision in Northside Bank v. Mountainbrook &c., Ga. App. (Case No.

A16A0005, decided July 14, 2016), we agree. In Northside Bank, we concluded that

the declaration of covenants, conditions, restrictions and easements for a subdivision

governed the homeowner association’s right to collect interest on past due

assessments. Slip op. at 4 (1). In that case and the one presently before us, the

declaration provided that interest could be collected at the maximum legal rate. As

this is not a definite rate, we concluded in Northside Bank that the seven percent per

                                           7
year rate mandated by OCGA § 7-4-2 (a) (1) (A) governed the rate of interest allowed

by the declaration. Slip op. at 5-6 (1). In so holding, we expressly rejected the

homeowner association’s argument that it was entitled to 18 percent interest pursuant

to OCGA § 7-4-16, a statute governing commercial accounts arising out of the sale

of goods or services other than a retail installment transaction. Id. Accordingly, we

vacate the portion of the judgment awarding interest at a rate greater than the seven

percent provided for by OCGA § 7-4-2 and remand this case for recalculation of the

interest at the correct rate. Id.

       Judgment affirmed in part, vacated in part, and case remanded with direction.

Barnes, P. J., and Rickman, J., concur.

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