An unpublished opinion of the North Carolina Court of Appeals does not constitute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