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South Carolina
JUDICIAL DEPARTMENT
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2010-05-27-01

state of south carolina

county of charleston

Jerome B. Crites, Jr., Christopher E. Coley, Michael L. Prescott, Louis A. Feher, and Patrick T. Autore, Plaintiffs,

               vs.

Frederick Henry Horlbeck, Eleanor Greene Horlbeck, Robert Bradley Company, Inc., Polly Point Plantation Property Owners Association, Inc., Defendants.

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IN THE COURT OF COMMON PLEAS
NINTH JUDICIAL CIRCUIT
CIVIL ACTION NO. 2008-CP-10-1888

ORDER GRANTING DEFENDANT ROBERT BRADLEY COMPANY, INC.’S MOTION FOR PARTIAL SUMMARY JUDGMENT AND DENYING PLAINTIFFS’ MOTIONS FOR SUMMARY JUDGMENT AND RELIEF PENDENTE LITE

 
 

On March 1, 2010, during a Non-Jury Term of Court, this Court heard the following Motions:  1) Defendant Robert Bradley Company, Inc.’s (“Robert Bradley Co.”) Motion for Partial Summary Judgment with respect to its voting rights pursuant to the Declaration of Covenants, Conditions, and Restrictions for Polly Point Plantation dated June 18, 2005 (“Declaration”);  2) Plaintiffs’ Motion for Relief Pendente Lite seeking dissolution of Polly Point Property Owners Association, Inc. (“POA”) pursuant to §§ 33-31-1430, et seq.; and  3) Plaintiffs’ Cross Motion for Summary Judgment.  Keating Simmons appeared on behalf of Plaintiffs, Wallace Lightsey and Rita Barker appeared on behalf of Defendant Robert Bradley Co., Henrietta Golding appeared on behalf of Defendants Eleanor Greene Horlbeck and Frederick Henry Horlbeck (“Horlbecks”), and Jenna McGee appeared on behalf of the POA.  The parties also submitted memoranda, and at the request of the Plaintiffs, submitted supplemental memoranda.

The Plaintiffs contend that the POA should be dissolved and the Plaintiffs’ motions should be granted as a result of Robert Bradley Co.’s control of the POA and unfair and illegal actions, including the POA’s amendment of the Declaration (“First Amendment”).  According to the Plaintiffs, the analysis in Queen’s Grant II Horizontal Property Regime v. Greenwood Development Corporation, 368 S.C. 342, 628 S.E.2d 902 (Ct. App. 2006) (“Queen’s Grant II”), regarding a declarant’s unilateral amendment to homeowners’ association governing documents invalidated the First Amendment.  The Defendants argue that the factors in Queen’s Grant II are inapplicable, for the First Amendment was not a unilateral amendment by the Declarant, but instead was validly voted upon and passed at an annual meeting of the POA membership. 

Based on the information presented at the hearing, the parties’ memoranda and the record in this case, the Court finds that, because the First Amendment was voted upon at an annual meeting of the POA and properly passed by Robert Bradley Co.’s Super Majority vote, the First Amendment is valid. 

UNDISPUTED FACTS

1.  Polly Point Plantation (“Polly Point”) is a small single-family residential subdivision on Wadmalaw Island, Charleston County.

2.  The POA is the property owners’ association for Polly Point.

3.  The Plaintiffs own lots within Polly Point and are members of the Defendant POA.

4.  Defendants Robert Bradley Co. and Frederick Henry Horlbeck (collectively, the “Declarant”) developed Polly Point and have certain rights pursuant to the Declaration.

5.  Defendant Eleanor Greene Horlbeck is Mr. Horlbeck’s wife and is a director and officer of the Defendant POA.

6.  Polly Point is governed by the Declaration.

7.  Article 8 of the Declaration provides that the Owners may amend the Declaration by an affirmative vote or affirmative written consent of a Super Majority. “Super Majority” is defined as Owners having aggregate votes greater than two thirds (2/3) of the total Votes (Article 1, 1.25).

8.  Section 1.27 of the Declaration defines Vote(s):  “[t]he term ‘Vote’ or ‘Votes’ shall mean the total number of votes attributable to each Lot or Residual Tract.  The Owner of each Lot shall be entitled to one (1) Vote for each Lot that he owns.  The Declarant shall be entitled to three (3) Votes for each Lot that the Declarant owns, with the Residual Tract being treated as if it were subdivided into twenty (20) individual Lots.”  (Emphasis added).

9.  The First Amendment was enacted on June 18, 2005 at a POA annual meeting.  Prior to the annual meeting, the property owners were sent notices of the meeting, which included a statement that the First Amendment would be presented for a vote. The Declarant, Robert Bradley Co. and Frederick Horlbeck, owned the Residual Tract at the time of the June 18, 2005 POA meeting and exercised the Declarant’s 60 votes in favor of the First Amendment.  The other property owners had a total of 19 votes at that time.

10.  This First Amendment provides that as long as the Declarant owns property within Polly Point, the Declarant shall always be entitled to the number of votes necessary for Declarant to vote a Super Majority on any issue presented for a vote.

CONCLUSIONS OF LAW

1.  Summary judgment is appropriate 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 judgment as a matter of law. Rule 56(c), S.C. R. Civ. P.; Helms Realty, Inc. v. Gibson-Wall Co., 363 S.C. 334, 340, 611 S.E.2d 485, 488 (2005).

2.  In determining whether any triable issue of fact exists, the evidence and all inferences which can reasonably be drawn therefrom must be viewed in the light most favorable to the nonmoving party. Medical Univ. of South Carolina v. Arnaud, 360 S.C. 615, 619, 602 S.E.2d 747, 749 (2004).  If triable issues exist, those issues must go to the jury. Mulherin-Howell v. Cobb, 362 S.C. 588, 595, 608 S.E.2d 587, 591 (Ct. App. 2005).  However, when plain, palpable, and indisputable facts exist on which reasonable minds cannot differ, summary judgment should be granted. Ellis v. Davidson, 358 S.C. 509, 518, 595 S.E.2d 817, 822 (Ct. App. 2004).  

3.  “A developer will frequently reserve certain rights by express provision in the declaration.”  Heritage Fed. Sav. and Loan Ass’n, 318 S.C. 535, 541, 458 S.E.2d 561, 565 (Ct. App. 1995).  These rights typically include use of and access to the common elements, amending governing documents, and approval or veto rights with respect to any amendment to the governing documents proposed.  Id

4.  “Understandably, developers want to retain control over their developments for long periods of time in order to assure their commercial success through the continued sale of parcels and construction of homes that preferably increase, but at least maintain, the value of the previously constructed homes in the subdivision.  Jones v. Nichols, 765 N.E.2d 153, 160 (Ind. Ct. App. 2002).

5.  Under the explicit language of the voting rights provision of section 1.27 of the Declaration, I find that Robert Bradley Co. had 60 votes attributable to its ownership of the Residual Tract when the First Amendment was voted upon pursuant to Articles 1 and 8 of the Declaration.  The 60 votes was equivalent to a Super Majority vote of the POA.

6.  Plaintiffs agreed to the Declarant’s weighted voting rights when purchasing their lots subject to the Declaration and they cannot now object before the Declarant has completed the development of Polly Point.  Palmetto Dunes Resort v. Brown, 287 S.C. 1, 6; 336 S.E.2d 15, 18 (Ct. App. 1985) (“The parties voluntarily bound themselves to this arrangement, which they had the right to do.”)

7.  Plaintiffs contend that they did not receive proper notice of the fact that the First Amendment would be considered at the annual meeting.  “[N]otice of an annual meeting need not include a description of the purpose for which the meeting is called.”  S.C. Code § 33-31-701. 

8.  While the law does not require specific notice of the amendment, in fact there was notice here that the amendment would be considered.  The only dispute is whether or not the proposed amendment itself was attached to the notice.  Notice is a concept of fundamental fairness and not a rigid concept, and, where a property owner is aware of the purpose of a meeting, the Court does not need to invalidate a vote due to a deficient notice.  See Oronoque Shores Condominium Association No. 1, Inc. v. Smulley, 114 Conn. App. 233, 241-42, 968 A.2d 996, 1001 (Conn. App. 2009).  I find that the notice of the June 18, 2005 Annual Meeting of the POA was proper pursuant to the Declaration and the Non-Profit Corporation Act (“Act”). 

9.  I further find that the First Amendment to the Declaration is valid.  It was presented at an annual meeting of the POA and voted upon at the meeting.  Robert Bradley Co. and Mr. Horlbeck, as the Declarant, voted their Super Majority vote in favor of the First Amendment and the vote carried pursuant to the Declarant’s voting rights under the Declaration.  

10.  Additionally, this Court holds that the analysis in Queen’s Grant II is inapplicable.  The Queen’s Grant II court evaluated whether a developer may reserve to himself the unilateral right to amend restrictive covenants, a scenario distinct from this case.  The Declarant’s exercise of its weighted voting rights at a properly called POA meeting does not constitute a unilateral amendment on the part of the Declarant.

IT IS ORDERED, ADJUDGED and DECREED that the Defendant Robert Bradley Co.’s Motion for Partial Summary Judgment is GRANTED.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Plaintiff’s Motion for Relief Pendente and Cross Motion for Summary Judgment are DENIED.

IT IS SO ORDERED.

______________________________________
The Honorable Roger M. Young, Sr.
Circuit Court Judge
Ninth Judicial Circuit

Charleston, South Carolina
Dated: May 27, 2010