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2010-UP-568 - Hinson v. Stafford Park HOA

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Robert Hinson, a.k.a. Robert H. Hinson, Jr., Appellant,

v.

Stafford Park HOA, Inc., Ernest Nyeguard, Richard Spatola, Mike Bailey, Individually and as Officers of Stafford Park HOA, Inc., Respondents.


Appeal From York County
Lee S. Alford, Circuit Court Judge


Unpublished Opinion No.   2010-UP-568
Submitted December 1, 2010 – Filed December 31, 2010


AFFIRMED


James W. Boyd, of Rock Hill, for Appellant.

Brian Scott McCoy, of Rock Hill, for Respondents.

PER CURIAM:  Robert Hinson appeals the order from a bench trial finding that the Stafford Park Homeowners Association's (Stafford Park) bylaws materially complied with the Declaration of Covenants and the statutes of this State.  As such, the court found that Stafford Park's Board of Directors was properly elected and its members acted within the scope of their office and in furtherance of the association's affairs when they assessed fees and filed a lien of foreclosure on Hinson's property.  We affirm.[1]

Hinson asserts that Stafford Park did not have the power to set and assess fees because bylaws conforming to the Restrictive Covenants were never properly placed into effect.  He also asserts that Stafford Park lacked the power to assess member fees because the common areas and amenities were not owned by Stafford Park before 2005.  As Hinson cites no authority to support the reversal of the trial court's ruling on these issues, we find them abandoned on appeal.  See Rule 208(b)(1)(D) SCACR ("[T]he particular issue to be addressed shall be set forth in distinctive type, followed by discussion and citations of authority."); First Sav. Bank v. McLean, 314 S.C. 361, 363, 444 S.E.2d 513, 514 (1994) (considering an issue abandoned because the appellant failed to provide pertinent argument or supporting authority); Jones v. S.C. Dep't of Health & Envtl. Control, 384 S.C. 295, 317, 682 S.E.2d 282, 294 (Ct. App. 2009) (deeming an issue abandoned on appeal if the argument is conclusory and unsupported by authority); Bennett v. Investors Title Ins. Co., 370 S.C. 578, 599, 635 S.E.2d 649, 660 (Ct. App. 2006) (noting an issue is abandoned on appeal when the appellant fails to cite any supporting authority for his position and makes only conclusory arguments).

As to whether the circuit court erred in holding Stafford Park's officers were validly elected and had the authority to maintain and assess member fees in accordance with the Restrictive Covenants, Stafford Park's bylaws, and the statutes of this State, we affirm.  Section 6.3(a) of the Restrictive Covenants states that Stafford Park's bylaws shall provide for "[t]he control of the Association by a Board of no less than five Directors who shall be elected by simple majority vote of the [o]wners present . . . at an annual meeting called for such purpose at which a simple majority shall constitute a quorum."  The Stafford Park Homeowners Association By-Laws Section II.F. explains how a quorum is formed (using the joinder method) to reach a simple majority.  It states, "[t]he joinder of a member in the action of a meeting by signing and concurring in the minutes thereof shall constitute the presence of such member for the purpose of determining a quorum."  Although there is no South Carolina case law specifically on point, section 33-31-140(1)(a) of the South Carolina Code (2006) states that members entitled to vote on an issue may approve it by the "affirmative vote of a majority of the votes of the members represented and voting at a duly held meeting at which a quorum is present or the affirmative vote of the greater proportion . . . of the members . . . as the . . .  bylaws . . . may provide . . . ."  Section 33-31-140(1)(b) enables a member to approve a vote by "a written ballot or written consent in conformity with this chapter."  Thus, the joinder method of achieving a quorum to attain a majority vote as stated in Stafford Park's bylaws comports with the Restrictive Covenants and the statutes of this State.    

Regarding the assessment of fees, section 33-31-302(15) of the South Carolina Code (2006) states in part, "[E]very corporation has . . . the same powers as an individual . . . to do all things necessary or convenient to carry out its affairs including, without limitation, power . . . to impose dues, assessments, and admission and transfer fees upon it members . . . ."  Section 7.1 of the Restrictive Covenants also provides "[a]ll covenants, restrictions, and affirmative obligations set forth in this Declaration shall run with the land and shall be binding upon all persons, firms, and corporations owning any interest in the lands now or hereafter affected by the Declaration . . . ."  The language of Stafford Park Homeowners Association By-laws Section IV.A.1. states in part:

[E]ach member is deemed to covenant and [to] agree to pay . . . to the Association, annual assessments or charges, . . . .  The annual and special assessments, together with such interest thereon and costs of collection thereof, as hereinafter provided shall be a charge on the land and shall be a continuing lien upon the property against which each assessment is made.  Each such assessment, together with such interest, costs and reasonable attorney's fees shall also be the personal obligation of the person who was the owner of such property at the time when the assessment fell due . . . .  

Pursuant to section 27-31-170 of the South Carolina Code (2007), "[e]ach co‑owner shall comply strictly with the bylaws and with the administrative rules and regulations adopted pursuant thereto . . . ."; see also Cedar Cove Homeowners Ass'n, Inc. v. DiPietro, 368 S.C. 254, 270, 628 S.E.2d 284, 292 (Ct. App. 2006) ("Restrictive covenants often authorize the creation of a homeowners' association, usually in the form of a not-for-profit corporation, and grant it authority to manage common areas, make regulations, levy assessments, and other similar privileges.") (citations omitted); Harbison Cmty. Ass'n, Inc. v. Mueller, 319 S.C. 99, 102, 459 S.E.2d 860, 862 (Ct. App. 1995) ("Covenants requiring property owners to pay fees for improvements, maintenance or other services to a homeowners association run with the land."); First Fed. Sav. & Loan Ass'n of Charleston v. Bailey, 316 S.C. 350, 354, 450 S.E.2d 77, 79 (Ct. App. 1994) ("Covenants requiring the payment of maintenance assessments are contractual in nature and bind the parties to the covenants in the same manner as other contracts.").  Therefore, we find Stafford Park acted with proper authority when it maintained and assessed member fees.       

Finally, as to whether the trial court erred in holding that Stafford Park and its board members acted within the scope of their powers and were protected by the business judgment rule, we affirm.  A corporation can only exercise the powers granted to it by law, its charter or articles of incorporation, and any bylaws made pursuant thereto.  Lovering v.  Seabrook Island Prop. Owners Ass'n, 289 S.C. 77, 82, 344 S.E.2d 862, 865 (Ct. App. 1986), aff'd as modified on other grounds, 291 S.C. 201, 203, 352 S.E.2d 707, 708 (1987), superseded on other grounds by S.C. Code Ann. § 33-31-302.  "Acts beyond the scope of a corporation's powers as defined by law or its charter are ultra vires.Id.; see also Kuznik v. Bees Ferry Assocs., 342 S.C. 579, 599, 538 S.E.2d 15, 25 (Ct. App. 2000) ("Under the business judgment rule, a court will not review the business judgment of a corporate governing board when it acts within its authority and it acts without corrupt motives and in good faith."); Goddard v. Fairways Dev. Gen. P'ship, 310 S.C. 408, 414, 426 S.E.2d 828, 832 (Ct. App. 1993) ("In a dispute between the directors of a homeowners association and aggrieved homeowners, the conduct of the directors should be judged by the 'business judgment rule' and absent a showing of bad faith, dishonesty, or incompetence, the judgment of the directors will not be set aside by judicial action.").  The business judgment rule only applies to intra vires acts, not ultra vires ones.  Id. at 605, 538 S.E.2d at 28; see also Dockside Ass'n, Inc. v. Detyens, 291 S.C. 214, 216, 352 S.E.2d 714, 716 (Ct. App.), aff'd, 294 S.C. 86, 362 S.E.2d 874 (1987) ("A court should be reluctant to question action taken intra vires by the governing board of a non-profit corporation.").  Stafford Park was acting within the scope of its powers granted pursuant to the language in the Restrictive Covenants, its bylaws, and the statutes of this State.   Therefore, Stafford Park's actions were intra vires and protected by the business judgment rule.

Accordingly, the judgment herein is

AFFIRMED.

THOMAS, PIEPER, and GEATHERS, JJ., concur.


[1] We decide this case without oral argument pursuant to Rule 215, SCACR.