Callawassie Island Members Club, Inc. v. Dennis

• Decision Date: 14 November 2018
• Docket Number: Appellate Case No. 2016-002187,Opinion No. 27835
• Citation: 425 S.C. 193,821 S.E.2d 667
• Parties: The CALLAWASSIE ISLAND MEMBERS CLUB, INC., Petitioner, v. Ronnie D. DENNIS and Jeanette Dennis, Respondents.
• Court: South Carolina Supreme Court

425 S.C. 193

821 S.E.2d 667

The CALLAWASSIE ISLAND MEMBERS CLUB, INC., Petitioner,

v.Ronnie D. DENNIS and Jeanette Dennis, Respondents.

Appellate Case No. 2016-002187

Opinion No. 27835

Supreme Court of South Carolina.

Heard May 1, 2018

Re-Filed November 14, 2018

Andrew F. Lindemann, of Davidson & Lindemann, PA, of Columbia; M. Dawes Cooke Jr. and John W. Fletcher, both of Barnwell Whaley Patterson & Helms, LLC, of Charleston; and Stephen P. Hughes, of Howell, Gibson & Hughes, PA, of Beaufort, all for Petitioner.

Ian S. Ford and Neil D. Thomson, both of Ford Wallace Thomson, LLC, of Charleston, for Respondent.

ORDER

After careful consideration of the petition for rehearing, the Court is unable to discover any material fact or principle of law that has been overlooked or disregarded. The petition for rehearing is denied. However, we did overlook the procedural fact that the court of appeals found it unnecessary to address all issues raised before it, so we substitute the attached revised opinion remanding this case to the court of appeals to address the other issues. In all other respects, the opinion is unchanged.

The petition for rehearing is denied.

/s/ John W. Kittredge, J.

/s/ John Cannon Few, J.

/s/ George C. James, Jr., J.

We would grant the petition for rehearing.

/s/ Donald W. Beatty, C.J.

/s/ Kaye G. Hearn, J.

The circuit court granted summary judgment to The Callawassie Island Members Club on the basis that its membership documents clearly and unambiguously require members to continue paying their dues until their membership is reissued, even after their resignation. The court of appeals reversed. We reverse the court of appeals and reinstate the summary judgment for all unpaid dues, fees, and other charges. Because Respondents raised other issues to the court of appeals that have not yet been addressed, we remand to the court of appeals for further proceedings consistent with this opinion.

I. Facts and Procedural History

In 1999, Ronnie and Jeanette Dennis purchased property on Callawassie Island. At that time, the Dennises joined a private club known as the Callawassie Island Club, and paid $31,000 to become "equity members." In their application, the Dennises agreed their membership would be governed by the "Plan for the Offering of Memberships in The Callawassie Island Club," which the developer of Callawassie Island created in 1994. The 1994 Plan included exhibits labeled as Bylaws and Rules. The 1994 Plan stated, "An equity member who has resigned from the Club will be obligated to continue to pay dues and food and beverage minimums to the Club until his or her equity membership is reissued by the Club." Similarly, the 1994 Bylaws stated, "Any equity member may resign from the Club by giving written notice to the Secretary. Dues, fees, and charges shall accrue against a resigned equity membership until the resigned equity membership is reissued by the Club."

The 1994 Plan contemplated that the members would eventually take over the assets and operation of the Island Club. In 2001, the members of the Island Club formed The Callawassie Island Members Club, Inc. for this purpose. The Members Club assumed ownership and operations of all Island Club amenities, including a golf course and driving range, tennis courts, a swimming pool, and a clubhouse. The members of the Island Club—including the Dennises—received a membership certificate to the Members Club and continued to enjoy the benefits of membership. The Members Club established its own Bylaws, Plan, and Rules in 2001, each of which was amended several times over the years.

In 2010, the Dennises decided they no longer wanted to be in the Members Club, so they submitted a "letter of resignation" and stopped making all payments. Those payments included $634 per month for the membership, "special assessments" that totaled $100 per month, and yearly food and beverage minimums of $1,000. In 2011, the Members Club filed a breach of contract action against the Dennises, alleging the unambiguous terms of the membership documents required the Dennises to continue to pay their membership dues, fees, and other charges until their membership is reissued. The Dennises denied any liability, alleging they were told by a Members Club manager that their maximum liability would be only four months of dues, because after four months of not paying, they would be expelled. The Dennises also alleged the membership arrangement violates the South Carolina Nonprofit Corporation Act. See S.C. Code Ann. §§ 33-31-101 to -1708 (2006 & Supp. 2017).

The Members Club filed a motion for summary judgment. The circuit court held a hearing and issued an order granting summary judgment. The court found the membership documents unambiguously require a resigned member to continue to pay dues, fees, and other charges until the membership is reissued. The court rejected the Dennises' arguments relating to the Nonprofit Corporation Act.

The Dennises appealed, and the court of appeals reversed on both issues. The Callawassie Island Members Club, Inc. v. Dennis , 417 S.C. 610, 790 S.E.2d 435 (Ct. App. 2016). The court of appeals found there was "some ambiguity in the governing documents as to whether club members are liable for dues accruing after resignation." 417 S.C. at 616, 790 S.E.2d at 438. In addition, the court of appeals found the provisions of the documents that require the Dennises to continue to pay their membership dues after resignation violate section 33-31-620 of the Nonprofit Corporation Act. 417 S.C. at 618-19, 790 S.E.2d at 439. The court of appeals found it unnecessary to address the other issues raised on appeal, 417 S.C. at 619 n.5, 790 S.E.2d at 440 n.5, and remanded to the circuit court for trial, 417 S.C. at 619, 790 S.E.2d at 440. The Members Club filed a petition for a writ of certiorari, which we granted.

II. Discussion

Under Rule 56(c) of the South Carolina Rules of Civil Procedure, summary judgment is proper when "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." The questions before us in this appeal are questions of law. See S.C. Dep't of Nat. Res. v. Town of McClellanville , 345 S.C. 617, 623, 550 S.E.2d 299, 302-03 (2001) ("It is a question of law for the court whether the language of a contract is ambiguous."); Town of Summerville v. City of N. Charleston , 378 S.C. 107, 110, 662 S.E.2d 40, 41 (2008) ("Determining the proper interpretation of a statute is a question of law ...."). We review questions of law de novo. 378 S.C. at 110, 662 S.E.2d at 41. Because the ambiguity of contracts and statutes are questions of law, we do not view the evidence in any particular light. Rather, we read the contract or statute to determine if its meaning is clear and unambiguous. See Town of McClellanville , 345 S.C. at 623, 550 S.E.2d at 302 ("A contract is ambiguous when the terms of the contract are reasonably susceptible of more than one interpretation.").

A. The Membership Arrangement

We begin our analysis of this case with a general discussion of the membership arrangement and the membership documents that govern that arrangement. Three documents governed the Dennises' membership in the Island Club and the Members Club—the Bylaws, the Plan, and the Rules. The three documents reference each other and are intended to operate together. When the Dennises first joined the Island Club, the 1994 versions of those documents applied. However, these documents were amended several times over the years, as permitted by the Bylaws, the Plan, and the Rules.¹ The first amendments occurred when the club assets were transferred from the Island Club to the Members Club in 2001, at which point the Members Club enacted its own Plan, Bylaws, and Rules.² All three documents were further amended several times during the 2000s. There is no evidence that the various amendments to the documents were in any way contrary to the Bylaws, Plan, and Rules in place at the time of the amendments. When the Dennises resigned in 2010, the membership documents in effect were the 2008 Plan, the 2009 Bylaws, and the 2009 Rules.³

B. Ambiguity of the Membership Documents

The Dennises argue these documents are ambiguous as to whether they are obligated to continue to pay membership dues, fees, and other charges after resignation, and therefore the circuit court erred in granting summary judgment. We disagree.

Section 5.11 of the 2008 Plan, entitled "Payment of Dues and Other Charges by Resigning Members," states,

An Equity Member who is on the waiting list to sell his/her membership will be obligated to continue to pay to the Club all dues, fees and other charges associated with his/her membership until his/her Equity Membership is reissued by the Club . Any unpaid dues, fees and other charges plus interest accrued under the then prevailing terms of the Rules will be deducted from the amount to be paid to the resigned member upon the reissuance of his/her resigned Equity Membership.

This language unambiguously provides the Dennises are obligated to continue to pay all membership dues, fees, and other charges after resignation until their membership is reissued. There are no provisions in the 2009 Bylaws or 2009 Rules that contradict this. Also, although not dispositive of the issue, this language is nearly identical to the provisions in the 1994 Plan and Bylaws that relate to continued payment after resignation.

In finding there was ambiguity in the membership documents, the court of appeals focused on the fact the language in the 1994 Rules governing "termination" was different than the language in the 1994 Bylaws and 1994 Plan governing "resignation." 417 S.C. at 616, 790 S.E.2d at 438. In particular, the court of appeals referenced the 1994 Rules that state, "Any member may terminate membership in the Club .... Notwithstanding termination, the member shall remain liable for any unpaid club account, membership dues and charges (including food and...