Court Opinion

ID: 4111912
Source: CourtListenerOpinion
Date Created: 2016-12-28 21:13:50.546403+00
Date Added: 2024-06-11T14:37:31.943814
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                          AT KNOXVILLE
                                 June 22, 2016 Session

        CIVIS BANK V. THE WILLOWS AT TWIN COVE MARINA
       CONDOMINIUM AND HOME OWNERS ASSOCIATION, INC.

              Appeal from the Chancery Court for Campbell County
             No. 7CH1-2015-CV-15 Elizabeth C. Asbury, Chancellor

            No. E2016-00140-COA-R3-CV-FILED-DECEMBER 28, 2016

This case involves a residential development on Norris Lake in Campbell County called
The Willows at Twin Cove Marina. The Declaration of Covenants, Conditions and
Restrictions for the development grants certain rights to the individual/entity described in
the document as the “Declarant.” As pertinent to this case, those rights include an
exemption from payment of maintenance assessments to the homeowner‟s association
under certain circumstances. The original owner of the development defaulted on
construction loans, resulting in a foreclosure sale of certain portions of the development
property and the personal property of the original owner. Civis Bank, the successor
owner of the property sold at foreclosure, brought this action asking the trial court to
declare it to be the “Declarant,” and thereby exempted from assessments levied by the
defendant homeowner‟s association. Both sides moved for summary judgment. The trial
court held that Civis did not meet the applicable definition of “Declarant” in the
Declaration. We agree. Accordingly, we affirm the court‟s grant of summary judgment
to the homeowners‟ association.

      Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
                           Affirmed; Case Remanded

CHARLES D. SUSANO, JR., J., delivered the opinion of the court, in which D. MICHAEL
SWINEY, C.J., and JOHN W. MCCLARTY, J., joined.

Wilson S. Ritchie and Rachel King Powell, Knoxville, Tennessee, for appellant, Civis
Bank.

                                             1
Walter N. Winchester and Joshua R. Holden, Knoxville, Tennessee, for appellee, The
Wilows at Twin Cove Marina Condominium and Home Owners Association, Inc.

                                        OPINION

                                             I.

       In 2004, Twin Cove Acquisition Company, Inc. (TCAC) began development of
“The Willows at Twin Cove Marina,” consisting of certain non-contiguous tracts of real
property on Norris Lake. The development included a marina, a residential subdivision,
condominiums, a swimming pool, and a clubhouse. TCAC obtained financing from Civis
Bank,1 among other lenders. In 2004, TCAC executed a deed of trust and security
agreement granting Civis a security interest in all of its real and personal property
interests in the development.

       On June 21, 2005, TCAC executed a “master deed and declaration of
condominium regime for The Willows at Twin Cove Marina” (the Willows Master
Deed). TCAC recorded the Willows Master Deed the following day. It defines TCAC as
the “Condominium Project Developer” and the “Declarant.” It also establishes “The
Willows at Twin Cove Marina Condominium and Home Owners Association, Inc.,” (the
HOA), consisting of the owners of a unit or units within the condominium project. The
Willows Master Deed authorizes the Board of Directors of the HOA to collect
maintenance assessments. It provides that the “Condominium Project Developer shall
not owe any maintenance fund assessments on any Unit that it is constructing,
rehabilitating or restoring until a certificate of occupancy is available on that Unit.”
Shortly thereafter, TCAC executed a second deed of trust and security agreement in favor
of Civis on June 27, 2005.

       On February 13, 2007, Civis assigned the 2004 and 2005 deeds of trust and
security agreements to BankEast. The same day, Civis purchased a 26.62% participation
interest in a new loan from BankEast to TCAC. In connection with the new loan, TCAC
executed an amended and restated deed of trust, security agreement, and assignment of
rents and leases in favor of BankEast, which grants BankEast the following:

              all of the real property, interests in real property, estates,
              easements, rights, improvements, fixtures and appurtenances
              thereunto . . . TOGETHER with all personal property . . . of
       1
         Civis Bank was formerly named Citizens Bank of East Tennessee, and operated under
that name until it changed its name on December 15, 2013. The name change is not pertinent to
any issue in this case, so we refer to the defendant bank as “Civis” throughout this opinion.
                                             2
              every kind and nature whatsoever, now or hereafter located
              in, upon or under the Property or any part thereof and used or
              usable in connection with any present or future operation of
              the Property and now owned or hereafter acquired by [TCAC]
              . . . TOGETHER with all interest, estate or other claims, both
              in law and in equity, which [TCAC] now has or may hereafter
              acquire in the Property.

(Capitalization in original.) The real property of the development consisted of eight
separate tracts, designated Tracts 1 through 8, all of which were encumbered by the 2007
deed of trust and security agreement.

       On August 25, 2008, TCAC recorded a Declaration of Covenants, Conditions and
Restrictions for the Willows at Twin Cove Marina (the Declaration of CCR). It contains
the provision at the heart of the dispute between the parties, i.e., the definition of the term
“Declarant”:

              “Declarant”: Shall mean TWIN COVE ACQUISITION
              COMPANY, INC., the owner of the Properties submitted
              hereto, together with any successor in title who comes to
              stand in the relation to the Community as his predecessor.
              Notwithstanding the foregoing, the phrase “Owner” as
              referred to in this definition shall not include in its capacity as
              such any Mortgagee except for such Mortgagee who acquires
              said Declarant‟s entire interest with respect to the Properties .
              . . at the time of such acquisition pursuant to Foreclosure of a
              Mortgage encumbering said Declarant‟s interest in the
              Properties . . . and who then expressly assumes the position of
              Declarant.

(Capitalization in original.) Among the rights provided to the Declarant in the
Declaration of CCR is an exemption from paying maintenance fund assessments under
certain conditions:

              Declarant shall not be responsible or liable for the payment of
              assessments (whether General, Parcel, Special or Specific) in
              respect to Lots for which Declarant holds record title and
              which do not contain occupied Residential Units (except as
              hereinafter provided); provided that Declarant covenants and
              agrees to pay assessments in the same manner as Lots

                                              3
              conveyed to Owners for each Lot owned by Declarant
              containing an occupied Residential Unit.

       TCAC eventually defaulted on its loan obligations to BankEast. It is undisputed
that by the time of the default, BankEast had released certain tracts of real estate from the
deeds of trust, including a portion of Tract 2, all of Tract 3, and other units in the
condominiums and single family lots. BankEast foreclosed on the remaining collateral
on January 13, 2012. At the foreclosure sale, BankEast was the high bidder, and became
the owner via conveyance by Substitute Trustee‟s Deed executed on January 13, 2012,
which conveys “the Property, . . . together with all of the hereditaments, improvements,
buildings, easements and appurtenances thereon and thereunto belonging[.]” At the
foreclosure sale, the Substitute Trustee also announced the sale of TCAC‟s personal
property encumbered by the deeds of trust. BankEast also purchased the personal
property, as reflected by a bill of sale executed by the substitute trustee, which states in
pertinent part:

              Substitute Trustee, (“Seller”) . . . does hereby grant, sell,
              transfer, and deliver unto BankEast, a Tennessee banking
              corporation, (“Buyer”) the following:

                                    *      *       *

              All of [TCAC‟s] right, title and interest in . . . all of [TCAC‟s]
              accounts, contract rights, accounts receivable, inventory,
              leases, income, intangibles and rights to income with regard
              to the Premises, the improvements thereon and the Collateral,
              now owned or hereafter acquired and now due or which
              hereafter may become due, including all contract rights and
              general intangibles with regard to the operation of the project
              to be constructed on the Premises, specifically including,
              without limitation, all rights, title and interest of [TCAC] in,
              to and under all operating, management and maintenance
              agreements relating, directly or indirectly, to the aforesaid
              project and the Premises[.]

       Shortly after the foreclosure sale, on January 27, 2012, the Tennessee Department
of Financial Institutions closed BankEast and appointed the Federal Deposit Insurance
Corporation (FDIC) as receiver. According to the affidavit of Ben Lindley, president and
CEO of Civis, “[t]he FDIC, as Receiver, sold substantially all of the assets of BankEast to
U.S. Bank, . . . including the [f]oreclosed [p]roperty.” There is no other documentation in
the record regarding the sale from the FDIC to U.S. Bank, so it is unclear what
                                               4
“substantially all of the assets of BankEast” specifically included under the terms of the
sale.

       On February 1, 2012, the HOA began assessing homeowners‟ dues 2 on the
property lots owned by U.S. Bank in the total amount of $1,350 per month. The
assessments were for ten lots located on Tracts 2, 4, 6, 7, and 8. On March 21, 2013, the
HOA filed a notice of lien for the assessments, claiming that the HOA had a lien for the
unpaid and delinquent assessments.

       On March 28, 2013, Civis purchased all of U.S. Bank‟s interest in the foreclosed
property, as reflected in a note purchase and sale agreement, special warranty deed
conveying the real property “with the appurtenances, estate, title and interest thereto,”
and bill of sale documenting the transfer of “all right, title and interest in and to the
personal property,” defined as including

              all of [U.S. Bank‟s] right, title and interest in and to the Loan
              Documents, together with any and all other security
              agreements, financing statements, assignments of leases,
              rents, or contracts, guaranties and all other loan documents
              and instruments evidencing or securing the Loan, and the real
              and personal property originally pledged as Collateral for the
              Loan, which was the subject of a foreclosure sale conducted
              by BankEast on January 13, 2012.

       On June 10, 2013, TCAC executed a document styled “Assignment of Declarant
Rights under Declaration of Covenants, Conditions and Restrictions and of
Condominium Project Developer Rights Under Master Deed,” in which it purported to
assign certain rights to Twin Cove Resort and Marina, LLC, stating:

              [TCAC] has agreed to also assign any and all rights it has as
              Declarant under the [Declaration of] CCR and Condominium
              Project Developer under the Master Deed as to the real
              property [in The Willows at Twin Cove Marina development]
              to the extent [TCAC] still has any such rights.

       2
         The complaint, other pleadings in the record, and the parties‟ briefs refer to these
assessments as “homeowner‟s dues.” Although that term does not appear to be included in the
Willows Master Deed or the Declaration of CCR, those documents do authorize the HOA to
issue monthly assessments to owners for common expenses of the association, including
maintenance and repairs. We assume for the purposes of this opinion that the homeowner‟s dues
are synonymous with such authorized monthly maintenance assessments.
                                             5
        On May 21, 2014, Civis executed a document styled “Second Amendment to
Covenants, Conditions, and Restrictions for The Willows at Twin Cove Marina,” which
states in pertinent part:

              WHEREAS, on March 28, 2013, [Civis] purchased Willows
              Court [Tract 7] and The Pointe [Tract 8], and all rights, title
              and interest in Willows Court and The Pointe, including the
              rights of the “Declarant” as defined in the Declaration [of
              CCR], from U.S. Bank National Association; and

                                   *      *       *

              WHEREAS, pursuant to Section 7.5 of the Declaration,
              Declarant has the right to amend the Declaration for the
              purpose of removing certain portions of the Property owned
              by the Declarant from the provisions of the Declaration as a
              result of any changes whatsoever in the plans for the
              Community desired to be effected by the Declarant; and

              WHEREAS, Civis, by virtue of its authority as Declarant, has
              changed its plans for the Community such that Willows Court
              and The Pointe should not be included in the Community;

              NOW THEREFORE, for and in consideration of the
              premises, and by virtue of its authority as Declarant, Civis
              Bank does hereby remove “The Willows Court” . . . and “The
              Pointe” . . . from the provisions of the Declaration.

(Capitalization in original.) The same day, Civis also executed a document stating “by
virtue of its authority as Declarant, Civis Bank does hereby terminate, revoke and cancel
the Declaration [of CCR] in its entirety, and the Declaration null, void and of no force or
effect whatsoever” as it pertained to Tract 7, known as Willows Court. Civis recorded
these documents a week later, on May 27, 2014.

       On February 5, 2015, Civis filed its complaint, asking the trial court to declare that
(1) any rights held by TCAC under the Willows Master Deed and Declaration of CCR
passed to Civis through foreclosure and subsequent conveyances; (2) the lien asserted by
the HOA for delinquent assessments of homeowners‟ dues is invalid; and (3) that the
HOA has no authority to make such assessments against Civis Bank. The HOA filed an
answer and counterclaim, arguing that Civis is not the Declarant under the terms of the
governing documents and alleging that Civis was liable for past due maintenance
                                              6
assessments in the amount of $51,300 plus accrued interest and late fee charges. The
HOA further asked the trial court to declare that Civis had no authority to execute and
record the Second Amendment to Covenants, Conditions, and Restrictions for The
Willows at Twin Cove Marina and the Termination of the Declaration of CCR for the
Willows Court portion of the development.

        Following discovery, both sides moved for summary judgment. The parties
generally agreed that there are no material facts in dispute. The trial court, construing the
definition of “Declarant” in the Declaration of CCR, held that Civis could not establish
that it was the Declarant for several reasons, including its findings that Civis never
“expressly assum[ed] the position of Declarant,” and that “Civis Bank cannot be
considered the Declarant since [TCAC] conveyed/assigned Declarant‟s Rights to Twin
Cove Resort and Marina, LLC.” The trial court further stated,

              According to the definition “Declarant” would only include a
              mortgagee who acquired Declarant‟s interest with respect to
              all of the property. Without dispute there have been
              foreclosure proceedings by other lending institutions for
              properties located within the development. These “owners”
              appear to be bankers/lenders.      They are not engaged in
              development of property of this nature. [Civis] did not
              dispute that “Civis is a banking institution and not primarily
              engaged in developing Condominiums.”

The trial court granted the HOA a judgment in the amount of $68,113.41, and declared
the “Termination of Declaration of Covenants, Conditions, Restrictions and Easements
for the planned development section of The Willows Court at Twin Cove Marina,” and
the “Second Amendment to Covenants, Conditions and Restrictions for The Willows at
Twin Cove Marina,” invalid and of no force and effect. Civis timely filed a notice of
appeal.

                                             II.

       The issue presented by Civis is whether the trial court erred in its conclusion that
Civis is not the Declarant under the terms of the governing contracts and thereby exempt
from the HOA‟s assessments of monthly homeowner‟s fees, and thus, whether the trial
court should have granted Civis, rather than the HOA, summary judgment.

                                             7
                                             III.

       We review a grant of summary judgment in accordance with the following
standard, as stated by the Supreme Court:

             Summary judgment is appropriate when “the pleadings,
             depositions, answers to interrogatories, and admissions on
             file, together with the affidavits, if any, show that there is no
             genuine issue as to any material fact and that the moving
             party is entitled to a judgment as a matter of law.” Tenn. R.
             Civ. P. 56.04. We review a trial court‟s ruling on a motion
             for summary judgment de novo, without a presumption of
             correctness.

                                  *      *          *

             [I]n Tennessee, as in the federal system, when the moving
             party does not bear the burden of proof at trial, the moving
             party may satisfy its burden of production either (1) by
             affirmatively negating an essential element of the nonmoving
             party‟s claim or (2) by demonstrating that the nonmoving
             party‟s evidence at the summary judgment stage is
             insufficient to establish the nonmoving party‟s claim or
             defense. . . . The nonmoving party must demonstrate the
             existence of specific facts in the record which could lead a
             rational trier of fact to find in favor of the nonmoving party.

Rye v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235, 250, 264-65 (Tenn.
2015) (italics in original).

       In this case, the material facts are undisputed, and the issue before us involves a
question of law, the construction and interpretation of contractual provisions.

                                             IV.

      The issue before us involves the transfer of Declarant‟s rights under a master deed
and declaration of covenants, conditions and restrictions for a residential development.
These rights are typically held and exercised by a real estate developer, and can be
encumbered under a mortgage or deed of trust held by a lender who finances such a
development. The Supreme Court addressed the issue of whether such rights were

                                              8
transferred in a sale from the initial property developer to a successor developer in
Hughes v. New Life Dev. Corp., 387 S.W.3d 453, 465-67 (Tenn. 2012), stating:

             In our view, the language of the Purchase and Sale
             Agreement clearly evidences the parties‟ intent that New Life
             acquire Raoul Land Development‟s rights and interests as the
             “Developer” of Cooley‟s Rift. We need look no further than
             the Work Product Documents that were sold by virtue of the
             Purchase and Sale Agreement.          These documents are
             obviously related to development activity . . . The Work
             Product Documents even directly reference residential
             subdivision development. Additionally, the Purchase and
             Sale Agreement includes the sale of “the name „Cooley‟s
             Rift‟ and all derivations thereof.” These items are consistent
             with more than simply acquiring ownership of real property
             in Cooley‟s Rift. Instead, this language amply reflects the
             parties‟ mutual intent that New Life succeed to Raoul Land
             Development‟s position as the Developer.

                                 *      *       *

             The deed in this case exhibits no different intent from the
             Purchase and Sale Agreement with respect to Raoul Land
             Development‟s transfer of its rights and interests as the
             Developer to New Life. The deed identifies the real property
             at issue and conveys it “with the appurtenances, estate, title
             and interest thereto.” Not surprisingly, the deed does not
             reference the Work Product Documents. At its core, a deed is
             simply “a written instrument by which land is conveyed.”
             Black‟s Law Dictionary 475 (9th ed. 2009).

             The Work Product Documents do not represent an estate or
             interest in land. In fact, the rights and interests of the
             Developer, as they are referred to in this case, ultimately
             concern rights of governance under the Association‟s Charter
             and Bylaws and do not represent an estate or interest in land.
             However, the deed does contain some limited language
             consistent with the transfer of rights and interests as the
             Developer evidenced by the Purchase and Sale Agreement.

                                 *      *       *
                                            9
              From our review of the language of the Purchase and Sale
              Agreement and the parties‟ actions in carrying out that
              contract, as it pertains to the real property through execution
              of the deed, we conclude that it was the intent of the parties
              that New Life acquire Raoul Land Development‟s rights and
              interests as the Developer of Cooley‟s Rift.

              As a final matter, the Homeowners, citing cases from Illinois,
              South Carolina, and Vermont, argue that Raoul Land
              Development‟s rights and interests as the Developer were
              personal and did not run with the land, and thus there must be
              evidence of a specific intent on the part of Raoul Land
              Development to convey the rights and interests. This
              argument misses the point. The circumstances described
              above do indeed reflect an intent on the part of Raoul Land
              Development to transfer its rights and interests, including its
              rights and interests as the Developer, to New Life.

(Footnotes omitted.) We glean two pertinent points from the Hughes decision. First,
contrary to the HOA‟s argument in this case, developer‟s or declarant‟s rights can be
transferred by general language. Specific and precise language describing what property
is to be conveyed is preferable and potentially more effective. But Hughes teaches that a
general transfer of, for instance, “all personal property” or “all contract rights” can be
effective to transfer declarant‟s rights, provided the intent to make such a transfer is
evident from an examination of the pertinent documents and the conduct of the parties.
The HOA‟s argument that Civis cannot be the Declarant in this case because the
documents establishing the chain of title transferring ownership of the property at issue
do not specifically mention “declarant‟s rights” is unpersuasive.

        Second, the Supreme Court in Hughes strongly suggests that as a general matter,
declarant‟s or developer‟s rights are personal interests, which, although freely
transferable, do not run with the land. Id. at 466-67. Several courts in other jurisdictions
have expressly reached such a conclusion. See Larkin v. City of Burlington, 772 A.2d
553, 557 (Vt. 2001); Woodglen Estates Ass’n v. Dulaney, 359 S.W.3d 508, 513 (Mo. Ct.
App. 2012). In the present case, the language of the Declaration of CCR suggests that the
parties did not intend the rights of the Declarant to automatically run with the land. It
states:

              Transfer or Assignment. Any or all of the special rights and
              obligations of the Declarant set forth in the Governing
                                            10
             Documents may be transferred or assigned in whole or in part
             to the Association or to other Persons, provided that the
             transfer shall not reduce an obligation nor enlarge a right
             beyond that which the Declarant has under this Declaration or
             the By-Laws. . . . No such transfer or assignment shall be
             effective unless it is in a written instrument signed by the
             Declarant and duly recorded in the Public Records.

                                  *      *        *

             Grants. The parties hereby declare that this Declaration, and
             the easements created herein shall be and constitute
             covenants running with the fee simple estate of the Properties.
             The grants of easements in this Declaration are independent
             of any covenants and contractual agreements undertaken by
             the parties in this Declaration and a breach by either party of
             any such covenants or contractual agreements shall not cause
             or result in a forfeiture or reversion of the easements granted
             in this Declaration.

(Emphasis added.) Further, the definition of “Declarant” anticipates that a successor
owner will have Declarant‟s rights only under certain circumstances, as further discussed
below.

       The trial court ruled that TCAC assigned the rights of Declarant after the
foreclosure sale, stating:

             On June 10, 2013 [TCAC] assigned the rights of Declarant
             and Condominium Project Developer to Twin Cove Resort
             and Marina, LLC. This document is a clear, unambiguous,
             assignment of Declarant‟s rights of the original developer to
             Twin Cove Resort and Marina, LLC.

                                  *      *        *

             . . . Civis Bank cannot be considered the Declarant since
             [TCAC] conveyed/assigned Declarant‟s rights to Twin Cove
             Resort and Marina, LLC.

We disagree with this ruling by the trial court. The document referred to in the quoted
material clearly states that TCAC “has agreed to also assign any and all rights it has as
                                             11
Declarant . . . to the extent [TCAC] still has any such rights.” (Emphasis added.) This
document was executed after TCAC‟s default and the foreclosure sale. At the foreclosure
sale, all of TCAC‟s real and personal interests in the development were sold. There is
nothing in the record indicating that TCAC retained any interest in the property at issue
after the foreclosure sale. Consequently, it had no rights to assign to Twin Cove Resort
and Marina, LLC on June 10, 2013, roughly 18 months after the foreclosure sale.

       We return to the definition of “Declarant,” which the parties agree is central to the
disposition of the issue:

              “Declarant”: Shall mean TWIN COVE ACQUISITION
              COMPANY, INC., the owner of the Properties submitted
              hereto, together with any successor in title who comes to
              stand in the relation to the Community as his predecessor.
              Notwithstanding the foregoing, the phrase “Owner” as
              referred to in this definition shall not include in its capacity as
              such any Mortgagee except for such Mortgagee who acquires
              said Declarant‟s entire interest with respect to the Properties .
              . . at the time of such acquisition pursuant to Foreclosure of a
              Mortgage encumbering said Declarant‟s interest in the
              Properties . . . and who then expressly assumes the position of
              Declarant.

        The trial court found that Civis did not “expressly assume[] the position of
Declarant.” We also disagree with this particular finding of the trial court. In the two
documents executed on May 21 and recorded on May 27, 2014, the “Second Amendment
to Covenants, Conditions, and Restrictions for The Willows at Twin Cove Marina,” and
the “Termination of Declaration of Covenants, Conditions, Restrictions and Easements
for the Planned Development Section of the Willows Court at Twin Cove Marina,” Civis
expressly states that it is acting “by virtue of its authority as Declarant.” Contrary to the
trial court‟s finding, we hold that under these undisputed facts, Civis expressly assumed
the position of Declarant.

       The definition of “Declarant” excludes a “Mortgagee” from being an “Owner” or
the “Declarant,” “except for such Mortgagee who acquires said Declarant’s entire
interest with respect to the Properties . . . at the time of such acquisition pursuant to
Foreclosure of a Mortgage encumbering said Declarant‟s interest in the Properties.”
(Emphasis added.) “Mortgagee” is defined as “the grantor, holder or beneficiary of a
Mortgage,” which is further defined as “a deed to secure debt, deed of trust, as well as a
Mortgage.” There is no doubt that the involvement of both Civis Bank and BankEast
with the development property was as a mortgagee. As already noted, it is undisputed
                                              12
that by the time of the default and foreclosure sale, BankEast had released certain tracts
of real estate from the deeds of trust. The following statements contained in Civis‟
response to the HOA‟s Rule 56.03 statement of material facts are undisputed:

             That U.S. Bank, BankEast and [Civis] were not the only
             bank[s] that loaned funds to [TCAC] and took as collateral
             real property within the HOA.

             That U.S. Bank, BankEast and [Civis] were not the only
             lender[s] to foreclose on its collateral in the Willows at Twin
             Cove.

             At foreclosure, BankEast did not acquire TCAC’s “entire
             interest” as that phrase is used in Willows [Declaration of]
             CCR, Article 1, Sec. 1.15.

(Emphasis added; citations to record omitted.) These undisputed facts establish that
BankEast, Civis‟ predecessor in interest, did not acquire the entire interest of TCAC at
the foreclosure sale, and thus, does not qualify as “Declarant” under the Declaration of
CCR. We disagree with the argument of Civis that “BankEast did not obtain Declarant‟s
rights as a „Mortgagee‟ at the foreclosure sale.” The sale was held under the terms of the
deeds of trust held by BankEast, in order to satisfy the debt from loans to finance the
development of the property. All of the rights and interests purchased by BankEast were
transferred as a result of the default and foreclosure, at the foreclosure sale.

       The reason the drafters of the Declaration of CCR included a restriction on a
mortgagee becoming a “Declarant” is fairly obvious: if a lender could become a
Declarant by foreclosing on a portion of the development property and not the whole,
then there could be more than one Declarant in the event of default. The rights of a
Declarant to develop, govern and manage the property are rather extensive. They
include, for example, the right to “unilaterally amend this Declaration for any purpose.”
To have more than one Declarant in such a situation would lead to chaos. Because Civis
does not qualify as a Declarant under the Declaration of CCR, the trial court correctly
held that it was not exempt from paying maintenance assessments on property lots it
owned within the development.

                                           V.
       In summary, although we disagree with two of the grounds relied upon by the trial
court, we agree with its conclusion that Civis is not the Declarant under the Declaration
of CCR because BankEast did not acquire TCAC‟s entire interest at the foreclosure sale.

                                           13
                                          VI.

       The summary judgment in favor of the HOA is affirmed. Costs on appeal are
assessed to the appellant, Civis Bank. The case is remanded for enforcement of the trial
court‟s judgment and collection of costs assessed below.

                                        _______________________________
                                        CHARLES D. SUSANO, JR., JUDGE

                                          14