AMBERFIELD HOMEOWNERS ASSOCIATION v. YOUNG

Ellington, Presiding Judge.

A group of homeowners in the Amberfield subdivision in Gwinnett County filed this declaratory judgment action, seeking a declaration that an amendment to the governing documents of the Amberfield Homeowners Association, Inc., filed in June 2015 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).

(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.

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. Two of the appellees deposed that in connection with the proposed amendment they received information that the Fields Club was struggling financially because of declining membership.

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 property, wherever located[.]" OCGA § 14-3-302 (4). A nonprofit corporation also has the power "[t]o make contracts[.]" OCGA § 14-3-302 (7).

The Property Owners' Association Act provides:

OCGA § 44-3-231 (b).

The declaration in this case, as amended in August 2011, authorized the Association, acting through its board of directors, inter alia, "to acquire, lease, hold, and dispose of tangible and intangible personal property and real property[.]" By definition, an easement is an interest in real property, albeit a limited one.8

Despite the broad authority conferred on the Association by the Georgia Nonprofit Corporation Code, the Georgia Property Owners' Association Act, and the August 2011 declaration, the appellees contend that "the effort by [the Association] to force membership in the Fields Club cannot be legally justified[,]" because the obligation to pay mandatory dues to the Fields Club is a personal covenant that has nothing to do with the appellees' properties, the property of the Association, or the common property of the association.9 This argument appears to invoke the touch-and-concern doctrine.10 Although Georgia precedent on this issue is scant, we conclude that a covenant to pay membership dues in a recreational club is not necessarily a personal covenant but can be found to touch and concern the land. See Lowry v. Norris Lake Shores Dev. Corp., 231 Ga. 549, 550-551, 203 S.E.2d 171 (1974) (A provision in a deed requiring the grantees and their successors to pay an annual fee for beach privileges, regardless whether the grantees exercised the privileges, concerned the land and was enforceable against a subsequent grantee with notice of the provision.); Lend A Hand Charity, Inc. v. Ford Plantation Club, Inc., 338 Ga.App. 594, 597-598 (2) (b), 791 S.E.2d 180 (2016) (A provision in the declaration of a property owners' association requiring lot owners to apply for membership in and pay dues for a recreational club, regardless whether the owners used the facilities, concerned the land and created a covenant running with the land binding on a subsequent grantee upon acceptance of the deed.).11 Moreover, the agreed consideration to be paid for an easement for the common benefit would constitute a common expense to be borne by the homeowners collectively through the assessment process.12

In addition, the appellees contend that they did not accept or utilize the easement and, therefore, that "the attempted imposition of Fields Club dues upon [them] was improper."13 Given the breadth of the language in the declaration as amended in August 2011 that defines the Association's authority to act, however, we conclude that the Association had the authority to accept easements on behalf of Amberfield homeowners as members of the Association, not merely on behalf of the Association itself. Certainly, a declaration could be drafted that would require the approval of a specified percentage of the members before the Association could accept such an easement.14 But the declaration in this case was not so drafted.

Based on all of the foregoing, we conclude that, even without the June 2015 amendment to the declaration, the Association was authorized, for the common benefit of all homeowners in the subdivision, to accept an easement granting Amberfield homeowners access to recreational facilities, and to assess the homeowners, including the appellees, their pro rata share of the ongoing cost of the easement. One could infer from the evidence discussed above that the board of the Association accepted the specific easement at issue based on its determination that access to a desirable recreation club would benefit Amberfield homeowners collectively, by protecting property values throughout the subdivision,15 that the Fields Club needed to increase membership to be financially viable, and that 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.

Under Georgia law, where the declaration governing a property owners' association "delegates decision-making authority to a group and that group acts, the only judicial issues are whether the exercise of that authority was procedurally fair and reasonable, and whether the substantive decision was made in good faith, and is reasonable and not arbitrary and capricious." (Citations omitted.) Saunders v. Thorn Woode Partnership L.P., 265 Ga. 703, 704 (2), 462 S.E.2d 135 (1995).16 In this case, the declaration delegated decision-making authority to the Association's board of directors.17

Because the Association already had the authority to accept the easement under the declaration as amended in August 2011, as we have explained, the issue whether the June 2015 amendment was procedurally defective is moot. Simply put, the declaration that the appellees prayed for in their petition for a declaratory judgment, that the June 2015 amendment is null and void, would not confer the ultimate relief they sought — freedom from being assessed a share of the ongoing expense to the Association arising under the Declaration of Easement and Cost Sharing Agreement. Consequently, the Association was entitled to judgment as a matter of law on the appellees' demand for a declaratory judgment, and the trial court erred in denying its motion for summary judgment and granting the appellees' motion.18

Judgment reversed.

Bethel, J., and Senior Appellate Judge Herbert E. Phipps concur.