Ocean Point Unit Owners Ass'n, Inc. v. Ocean Isle W. Homeowners Ass'n, Inc. ( 2018 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA17-1289
Filed: 4 December 2018
Brunswick County, No. 14 CVS 1675
OCEAN POINT UNIT OWNERS ASSOCIATION, INC., a North Carolina non-profit
corporation, Plaintiff,
v.
OCEAN ISLE WEST HOMEOWNERS ASSOCIATION, INC., a North Carolina non-
profit corporation, Defendant.
Appeal by Defendant from judgment entered 15 June 2017 by Judge James G.
Bell in Brunswick County Superior Court. Heard in the Court of Appeals 8 August
2018.
Watts Law Group PLLC, by Susan A. Fine and S. Denise Watts, for the
Plaintiff-Appellee.
McCoy Wiggins PLLC, by Richard M. Wiggins, for the Defendant-Appellant.
DILLON, Judge.
Defendant Ocean Isle West Homeowners Association, Inc. (the “Homeowners
HOA”), appeals from the trial court’s judgment granting Plaintiff Ocean Point Unit
Owners Association, Inc. (the “Condo UOA”), summary judgment. After careful
review, we affirm in part and vacate and remand in part.
I. Background
OCEAN POINT UOA V. OCEAN ISLE HOA
Opinion of the Court
This matter involves a property dispute on the western end of Ocean Isle.
Ocean Isle is a narrow island running west to east. At the western (left) end lies
twenty (20) single-family lots which are part of the Homeowners HOA. These lots
are numbered Lots 1-20 from west (left) to east (right). Lot 20 is the eastern-most
(rightmost) lot in the Homeowners HOA. Just to the east (to the right) of Lot 20 is
Lot 21, which is not part of the Homeowners HOA. Rather, Lot 21 is a vacant lot
owned by the Condo UOA. To the east (to the right) of Lot 21 is Lot 22. Lot 22 is a
larger lot where the condominium units served by the Condo UOA are located. Lot
22 is not owned by the Condo UOA itself, but rather it is owned in common by the
condominium unit owners.
The northern boundaries of the aforementioned lots are the northern shore of
Ocean Isle. There is one road, Ocean Isle West Boulevard, which provides ingress
and egress to all the lots on the western end of Ocean Isle. This road runs across the
northern portion of each lot.
In 1999, the then-owner of Lot 21, the vacant lot currently owned by the Condo
UOA, granted the Homeowners HOA a non-exclusive easement (the “Easement”) on
the western portion of Lot 21 along the road for the purpose of the installation and
maintenance of a card gate facility. The Homeowners HOA desired to install the card
gate facility to limit access to the western portion of Ocean Isle to only the
Homeowners HOA residents and invited guests. The Homeowners HOA constructed
-2-
OCEAN POINT UOA V. OCEAN ISLE HOA
Opinion of the Court
its card gate facility on the road approximately twenty-five (25) feet from the western
border of Lot 21. The owners of Lot 21 subsequently conveyed their interest in Lot
21 to the Condo UOA.
In June 2014, the Homeowners HOA moved its card gate facility about thirty
(30) feet to the east along the road. The keypad itself, though, was actually placed by
the Homeowners HOA even further east on the road portion of Lot 22, where the
condominiums themselves are located.
1
● Gate access keypad for
■ Original card gate facility ▲ Second card gate facility
second card gate facility
1 Image adapted from Brunswick County GIS Data Viewer, found at:
http://brunsco.maps.arcgis.com/apps/webappviewer/index.html?id=6df283e1aa634006baeedf6daac40
d38&query=Parcels,PIN,107515634896.
-3-
OCEAN POINT UOA V. OCEAN ISLE HOA
Opinion of the Court
Three months later, in September 2014, the Condo UOA filed this action
seeking (1) a declaratory judgment regarding the rights and duties bestowed by the
Easement, (2) an order directing the Homeowners HOA to move its new card gate
facility off of land that the Homeowners HOA had no right to use, and (3) damages
for the use of property outside the Easement area without permission. During the
course of litigation, the Homeowners HOA failed to respond timely to discovery
requests by the Condo UOA, and the trial court entered an order deeming each of the
Condo UOA’s Requests for Admission to be granted.
In June 2017, the trial court granted the Condo UOA’s motion for summary
judgment, ordering the Homeowners HOA to move the new card gate facility (gate
and keypad) and to restrict the Homeowners HOA’s use to the Easement area on the
western side of Lot 21 and to repair any outstanding damage caused to Lots 21 and
22 by the installation and removal of the new card gate facility. The trial court also
awarded punitive damages and attorney’s fees to the Condo UOA.
The Homeowners HOA appeals.
II. Analysis
On appeal, the Homeowners HOA “abandons any issue in this appeal as to
whether it had the right to move the card gate to a different location within the
easement,” essentially conceding that it did not have the right to do so under the
terms of the Easement. Rather, the Homeowners HOA contends that the issues
-4-
OCEAN POINT UOA V. OCEAN ISLE HOA
Opinion of the Court
raised in the complaint and the respective governing statutes do not support the trial
court’s findings and conclusions regarding Lot 22, nor its awards of punitive damages
and attorney’s fees. We address each argument in turn.
A. Lot 22
The Homeowners HOA challenges the portions of the trial court’s order
directing it to repair the damage caused by its placement of the new keypad onto Lot
22, the lot where the condominium units are situated. Specifically, the Homeowners
HOA contends that the Condo UOA never mentioned Lot 22 in its complaint, nor did
the Condo UOA show that it was a real party in interest regarding any claim
pertaining to Lot 22. We disagree.
North Carolina follows the “notice theory” of pleading. “Under the notice
theory of pleading, a statement of a claim is adequate if it gives sufficient notice of
the events or transactions which produced the claim to enable the adverse party to
understand its nature and basis and to file a responsive pleading.” Pyco Supply Co.
v. Am. Centennial Ins. Co., 321 N.C. 435, 442, 364 S.E.2d 380, 384 (1988). This
simpler method of pleading is mindful of the “liberal opportunity for discovery and
the other pretrial procedures” used in our trial process to narrow and refine the
issues, claims, and facts relative to an action. Id. at 442-43, 364 S.E.2d at 384.
Here, it is true that the Condo UOA never specifically alleged in its complaint
that part of the new card gate facility, namely the new keypad, was actually
-5-
OCEAN POINT UOA V. OCEAN ISLE HOA
Opinion of the Court
constructed on Lot 22. But the Condo UOA clearly alleged in its complaint that the
Homeowners HOA improperly moved the keypad eastward outside the Easement
area without permission and that the Condo UOA wanted the keypad moved back to
its original location, and that the Condo UOA wanted the Homeowners HOA to repair
any damage caused to the property by the new card gate facility. Specifically, the
Condo UOA alleged that the Homeowners HOA moved its card gate facility
“approximately 30 (thirty) feet eastward . . . adjacent to the eastern property line of
Lot 21[,]” which could be understood as the western property line of Lot 22. Also, the
Condo UOA prayed the trial court to enter an order directing the Homeowners HOA
to “repair any damage to the property caused by the installation and/or the removal
of said gate.” There is no ambiguity in the complaint as to the identity of the card
gate facility which the Condo UOA alleges was wrongfully installed by the
Homeowners HOA. Therefore, we conclude that the Condo UOA met the
requirements of notice pleading with regard to the new keypad placed onto Lot 22.
Further, we conclude that the Condo UOA qualified as the “real party in
interest” to bring the claim regarding any damage to Lot 22 caused by the new card
gate facility, notwithstanding that the Condo UOA only owns Lot 21 and that Lot 22
is technically owned in common by the condominium unit owners themselves.2 Our
2 Our Condominium Act states that a development will not be considered a condominium under
the Act “unless the undivided interests in the common elements are vested in the unit owners”
themselves, and not in a separate association. N.C. Gen. Stat. § 47C-1-103(7) (2017).
-6-
OCEAN POINT UOA V. OCEAN ISLE HOA
Opinion of the Court
Supreme Court has held that an association may sue in its own name on behalf of its
members, so long as the association represents a joint interest “common to the entire
membership, [or] shared by all in equal degree.” River Birch Assocs. v. City of
Raleigh, 326 N.C. 100, 130, 388 S.E.2d 538, 555 (1990) (quoting Warth v. Seldin, 422
U.S. 490, 515 (1975)).
An 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.
Id. (quoting Hunt v. Washington State Apple Advert. Comm., 432 U.S. 333, 343
(1977)). It is undisputed here that the Condo UOA, which owns Lot 21, is the
association for the condominium unit owners who own Lot 22. For instance, in the
complaint, the Condo UOA alleged:
3. The members of the Plaintiff Association are the owners
of units in Ocean Point, Phase 1, A Condominium, located
in Ocean Isle Beach, Brunswick County, North Carolina,
as condominium is shown and depicted on maps recorded
in Condo Map 6, Pages 52-61 of the Brunswick County
Registry, North Carolina, with the Declaration of
Condominium being recorded in Book 734, at Page 548 of
the Brunswick County Registry on the 10th day of June,
1988.
Defendant admitted this allegation in its answer. Additionally, a search of Condo
Map 6, Pages 52-61, on the Brunswick County Registry reveals the property referred
-7-
OCEAN POINT UOA V. OCEAN ISLE HOA
Opinion of the Court
to is Lot 22. There is nothing in the record which shows that any particular
condominium unit owner was damaged differently than the other unit owners by the
placement of the keypad onto Lot 22. Therefore, we conclude that the placement of
the keypad onto the common area of Lot 22 affected the condominium unit owners
equally such that the Condo UOA had standing to pursue the claim on behalf of the
unit owners.
B. Punitive Damages
The Homeowners HOA argues that the trial court erred “in granting plaintiff’s
request for summary judgment” regarding the award of punitive damages. We agree.
In its order, the trial court awarded the Condo UOA $10,000 in punitive
damages. However, the trial court did not cite to any findings or otherwise explain
upon what basis it was making the award.
We conclude that the trial court erred for two reasons. First, most basically, it
is generally not appropriate for the trial court at the summary judgment stage to
award punitive damages. See Cockerham-Ellerbee v. Town of Jonesville, 190 N.C.
App. 150, 157, 660 S.E.2d 178, 182 (2008) (holding that punitive damages were not
appropriate at summary judgment because whether clear and convincing evidence of
willful and wanton conduct existed was a question for the jury.) Second, we cannot
discern the basis for the award; the trial court did not indicate whether the award
was based on a tort or other claim for which punitive damages might be available or
-8-
OCEAN POINT UOA V. OCEAN ISLE HOA
Opinion of the Court
on the claim for declaratory relief or other claim for which punitive damages are
generally not recoverable. See Id. at 154-56, 660 S.E.2d at 181-82. It simply decreed
that punitive damages were awarded. Therefore, we vacate the portion of the trial
court’s order awarding punitive damages to the Condo UOA and remand the issue for
further proceedings consistent with this opinion.
C. Attorney’s Fees
Lastly, the Homeowners HOA challenges the trial court’s award of attorney’s
fees. In North Carolina, attorney's fees are taxable as costs only when expressly
authorized by statute. See City of Charlotte v. McNeely, 281 N.C. 684, 691, 190 S.E.2d
179, 185 (1972).
Here, the trial court failed to state the statutory basis for its award or
otherwise make appropriate findings to support its award of attorney’s fees. See, e.g.,
Owensby v. Owensby, 312 N.C. 473, 476, 322 S.E.2d 772, 774 (1984) (holding that, in
awarding attorney’s fees, the trial court must “make findings of fact as to the nature
and scope of legal services rendered, the skill and the time required upon which a
determination of reasonableness of the fees can be based”). Rather, the only mention
of the attorney’s fees at all is in the decretal paragraph containing the award itself.
We, therefore, vacate the trial court’s award of attorney’s fees. On remand, the trial
court may revisit the issue but must make adequate findings of fact and conclusions
of law to support any award of attorney’s fees.
-9-
OCEAN POINT UOA V. OCEAN ISLE HOA
Opinion of the Court
III. Conclusion
We hold that the trial court did not err in ordering the Homeowners HOA to
make all necessary repairs to Lot 22 resulting from movement of the card gate facility.
The Condo UOA’s pleadings adequately showed that it was a real party in interest
with respect to Lot 22 and placed the Homeowners HOA on notice that it sought relief
from all harm caused by movement of the card gate facility. And, on appeal, the
Homeowners HOA expressly abandoned any issue as to whether it had the right to
install the new card gate facility in the location where it made the installation.
We hold that the trial court did err in awarding punitive damages at the
summary judgment stage. Therefore, we vacate the trial court’s award of punitive
damages and remand the issue for further proceedings for a trial on this issue.
Finally, we hold that the trial court erred in awarding the Condo UOA
attorney’s fees. Specifically, the trial court failed to state the basis for the award or
to make appropriate findings necessary to support its award of attorney’s fees. We,
therefore, vacate the trial court’s award of attorney’s fees and remand the matter for
reconsideration by the trial court. On remand, the trial court may consider additional
evidence and make any new findings of fact and conclusions of law.
AFFIRMED IN PART, VACATED AND REMANDED IN PART.
Judges DAVIS and INMAN concur.
- 10 -