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Amberfield Homeowners Association, Inc. v. Young

Court of Appeals of Georgia, Third Division

May 15, 2018

AMBERFIELD HOMEOWNERS ASSOCIATION, INC.
v.
YOUNG et al.

          ELLINGTON, P. J., BETHEL, J., and SENIOR APPELLATE JUDGE PHIPPS.

          Ellington, Presiding Judge.

         A group of homeowners in the Amberfield subdivision in Gwinnett County filed this declaratory judgment action, seeking a declaration that a certain amendment to the governing documents of the Amberfield Homeowners Association, Inc. is null and void.[1] The amendment expressly authorized the Association to enter into an agreement with a nearby private swim and tennis club. Under the agreement, the club granted an easement giving the association's members the right to use the club's facilities as members. The agreement provided that club fees would be added to the assessments collected from members by the Association and would in turn be remitted by the Association to the club.

         The complaint alleged, inter alia, that the amendment to the governing documents was void on its face, alleging specifically that Georgia law and the governing documents of the Association do not permit the Association to force the plaintiffs, without their consent, to be members of a private club that is not part of the Association and do not permit the Association to set itself up as a debt collector for a third party entity over which the Association has no legal control or authority.[2]

         The parties filed cross-motions for summary judgment. The trial court determined that the amendment was void and granted the plaintiffs' motion for summary judgment. The trial court also denied the Association's cross-motion for summary judgment. The Association appeals, challenging both rulings. For the reasons explained below, we reverse.

         Summary judgment is proper "if 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[.]" OCGA § 9-11-56 (c).

[A] defendant who will not bear the burden of proof at trial need not affirmatively disprove the nonmoving party's case, but may point out by reference to the evidence in the record that there is an absence of evidence to support any essential element of the nonmoving party's case. . . . Summary judgments enjoy no presumption of correctness on appeal, and an appellate court must satisfy itself de novo that the requirements of OCGA § 9-11-56 (c) have been met. In our de novo review of the grant of a motion for summary judgment, we must view the evidence, and all reasonable inferences drawn therefrom, in the light most favorable to the nonmovant.

         (Citations and punctuation omitted.) Cowart v. Widener, 287 Ga. 622, 624 (1) (a) (697 S.E.2d 779) (2010). When, as in this case, the parties file cross-motions for summary judgment, "each party must show that there is no genuine issue of material fact regarding the resolution of the essential points of inquiry and that each, respectively, is entitled to summary judgment; either party, to prevail by summary judgment, must bear its burden of proof." (Citation and punctuation omitted.) Plantation Pipe Line Co. v. Stonewall Ins. Co., 335 Ga.App. 302 (780 S.E.2d 501) (2015). Moreover, "the declaration of a homeowner's association is considered a contract, and we therefore apply the normal rules of contract construction to determine the meaning of the terms therein." (Punctuation and footnote omitted.) Marino v. Clary Lakes Homeowners Assn., Inc., 331 Ga.App. 204, 208 (1) (770 S.E.2d 289) (2015).[3] Viewed in the light most favorable to the non-moving parties respectively, the record shows the following undisputed facts.[4]

         A developer recorded the original declaration of covenants and restrictions for the Amberfield subdivision in July 1992, resulting in the creation of Amberfield Homeowners Association, Inc., a nonprofit corporation. The Amberfield declaration was submitted to the terms of the Georgia Property Owners' Association Act, OCGA § 44-3-220 et seq.[5] The Association filed an amended declaration in August 2011.

         Prior to June 2015, membership in a nearby swim and tennis club, owned and operated by The Fields Swim & Tennis Club, Inc., was available to the all residents in the Amberfield community and other communities. Some Amberfield residents had elected to join the Fields Club and paid club dues, but the plaintiffs/appellees in this case were not members of the Fields Club. The boards of the Association and the Fields Club agreed that the Fields Club needed to increase membership to be financially viable. This could be accomplished if members of the Association were required, rather than merely invited, to join the Fields Club and pay club membership fees.

         In March 2015, the Association distributed a ballot to its members, stating that the Board proposed the adoption of an amendment to the declaration which, "once adopted by the members and recorded" in the land records would "authorize [the Board] . . . to enter into a recorded Easement and Cost Sharing Agreement with The Fields Swim & Tennis Club" to "establish[ ] a user benefit" for the owner of each lot "allowing continued use and enjoyment of the Basic Club Amenities other than the Tennis Amenities (the "Basic Membership") [and to] establish[ ] an obligation of each Owner to pay periodic Club Fees." The ballot stated that club fees would be payable by the owners to the Association in the same manner as assessments under the declaration and would be payable by the Association to the club.

         On June 15, 2015, the president of the Association certified under oath that the balloting had been conducted according to Georgia law and the governing documents and that the proposed amendment had been approved by at least 66 2/3 percent of the eligible vote, as required. The following day, the Association recorded an amendment to the declaration authorizing the Association to enter into the planned Easement and Cost Sharing Agreement with the Fields Club.[6]

         The officers of the Association and the Fields Club executed the Declaration of Easement and Cost Sharing Agreement in December 2015 and filed it in the real property records. The Agreement expressly provided that the easement for the use of the Fields Clubs facilities would run with the land of homeowners' lots as well as with the Association's common areas.[7] In the event of a change in the ownership of a lot, the club membership of the selling owner would terminate and the membership in the Fields Club would "automatically transfer to the new Owner."

         This suit followed in June 2016. Although the Association sought the June 2015 amendment purportedly to gain the authority to enter into the Declaration of Easement and Cost Sharing Agreement with the Fields Club, when the Association moved for summary judgment, it argued, inter alia, that it had not been required to amend the declaration in order to enter into the Agreement and include club fees in members' assessments.

         On appeal, the Association returns to the threshold issue whether it needed the June 2015 amendment to have the authority to enter into the Declaration of Easement and Cost Sharing Agreement and to include Fields Club fees in members' assessments. Specifically, the Association contends that the declaration as amended in August 2011 granted it the authority to accept an easement against the land of another for the common benefit of Amberfield homeowners, to enter into a contract with another for the homeowners' common benefit, and to levy assessments for common expenses and that such authority was consistent with the provisions of the Georgia Nonprofit Corporations Code and the Property Owners' Association Act. The Association contends that the December 2015 Agreement inures to the common benefit of the homeowners in that, if membership in the Fields Club had remained voluntary, the entire subdivision might well have lost access to an amenity package of the sort commonly expected in suburban subdivisions and, therefore, stabilizing the Fields Club by mandating membership would help to maintain the property values of the entire subdivision.

         As all parties acknowledge, both the Georgia Nonprofit Corporation Code and the Georgia Property Owners' Association Act give very broad powers to homeowners' associations, subject to the terms of the applicable governing documents. The Nonprofit Corporations Code provides that, unless the articles of incorporation provide otherwise, every nonprofit corporation "has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, " including "[t]o purchase, receive, lease, or otherwise acquire, own, hold, improve, use, and otherwise deal with real or personal property or any legal or equitable interest in ...


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