DCW Enterprises, Inc. v. Terre du Lac Ass'n, Inc., 70608

• Decision Date: 16 September 1997
• Docket Number: No. 70608,70608
• Citation: 953 S.W.2d 127
• Parties: DCW ENTERPRISES, INC., Plaintiff/Appellant, v. TERRE du LAC ASSOCIATION, INC., Defendant/Respondent.
• Court: Missouri Court of Appeals

Page 127

953 S.W.2d 127

DCW ENTERPRISES, INC., Plaintiff/Appellant, v. TERRE du LAC ASSOCIATION, INC., Defendant/Respondent.

No. 70608.

Missouri Court of Appeals,

Eastern District,

Southern Division.

Sept. 16, 1997.

Dennis E. McIntosh, Farmington, for plaintiff/appellant.

David L. Mayhugh, Park Hills, for defendant/respondent.

AHRENS, Presiding Judge.

Plaintiff, owner of subdivision property, brought a declaratory judgment action against the subdivision property owners association claiming that the association had taken actions outside its bylaws in assessing property and imposing a late payment assessment. The trial court declared that the association acted within its powers in those respects. Plaintiff appeals, asserting the declarations in favor of the association were error. We affirm in part and reverse and remand in part.

The defendant, Terre du Lac Association, Inc. (the Association), a not-for-profit corporation is the property owners Association for the Terre du Lac subdivision in St. Francois County. The Association is governed by a board of directors. Property in the Terre du Lac subdivision is subject to restrictive covenants, including an agreement to abide by the bylaws of the Association and to make annual payments for the maintenance and operation of the subdivision areas and facilities. Non-payment of the annual charges constitutes a lien on the land. Section 8(A) of the Association bylaws gives the board authority to make and collect assessments against members to defray the costs of the Association. Annual assessments are due on May 1 of each year.

Section 12(B) of the Association bylaws provides: "If any one member shall own contiguous lots, he shall be allowed but one vote regardless of the number of lots so held and shall pay one single assessment thereon in the same amount as the owner of a single parcel of property."

Plaintiff DCW Enterprises, Inc. (DCW) owns a substantial amount of property within Terre Du Lac. At issue in this case is its unplatted property known as "The Campgrounds" and two platted contiguous unimproved lots, 2-M-23 and 3-M-23. The two platted lots are adjacent to one another and share a common boundary with the Campgrounds. Prior to 1991 the Association assessed the two platted lots and the Campgrounds together.

On February 16, 1991 the board passed a resolution that "unplatted areas, except when previously determined, will be considered Commercial areas and not defined as a lot." At the same meeting the board also passed a resolution that the 1991 assessment rate remain the same as the 1990 rate which was $100.00 for an unimproved lot, $200.00 for an improved lot, and $300.00 for a commercial area. Dues remained at $50.00 per year according to the bylaws.

On March 3, 1991, the board passed a resolution that a 10% late payment assessment be charged on delinquent dues and assessments received on or after May 1, 1991. The Association notified property owners of this late payment assessment by a letter accompanying the assessment statements.

As a result of the February 16 resolutions, the Association no longer considered the Campgrounds contiguous to lots 2-M-23 and 3-M-23 for assessment purposes and thereafter assessed DCW separately for the Campgrounds. DCW did not tender payment of the assessment until July 16, 1991 and then did not pay the full amount assessed because it challenged the separate assessment of the Campgrounds. It was then charged the late payment assessment. DCW later paid the late payment assessment under protest in order to prevent liens from being filed on its properties.

DCW filed a two-count petition for declaratory judgment. In Count I, DCW sought a declaration that the Association's bylaws did not permit it to impose the late payment assessment. In Count II DCW sought a declaration that it had tendered the correct assessment amount to the Association based on its interpretation that the Campgrounds is contiguous to its two adjacent lots and is thus subject to one $350.00 assessment. DCW further sought declarations that the Association had wrongfully denied it a building permit and the right to vote in the 1992 board election.

After a bench trial the court entered its judgment and order supported by findings of fact and conclusions of law. The trial court's judgment provided as follows:

1. Lots 2-M-23 and 3-M-23 are not contiguous to the campgrounds parcel such that Plaintiff would be obligated to pay only one single assessment. The assessments as determined by Defendant which Plaintiff has contested in his declaratory judgment action filed herein are and were correct as determined by Defendant.

2. Defendant did not wrongfully refuse Plaintiff's tender of assessments and dues pertaining to Lots 2-M-23 and 3-M-23 and the campgrounds parcel.

3. Defendant is permitted to assess Plaintiff a 10% costs of collection and Plaintiff is not entitled to a refund of any charges pertaining to the imposition of a 10% delinquency fee.

4. Defendant did not wrongfully deny Plaintiff a construction permit in September of 1992.

5. Defendant did wrongfully deprive Plaintiff its right to vote in the election for Board of Directors in November of 1992.

6. Defendant did wrongfully file certain liens against Plaintiff for non-payment of dues and assessments.

7. Defendant is without authority to withhold any and all membership privileges to an owner of multiple lots and/or parcels if the owner is delinquent on assessments pertaining to only one lot and/or parcel.

8. Neither party is awarded attorney fees herein.

9. Defendant is entitled to all money previously deposited with the Clerk of the Circuit Court in disputed membership dues and assessments.

Costs assessed against Plaintiff.

DCW appeals, contending the trial court's declarations in paragraphs 1 through 3 are erroneous. It also asserts the trial court erred in making one of its conclusions of law. It further maintains that this court's reversal of that portion of the judgment, combined with the relief it obtained in declarations 4 through 6, would constitute special circumstances which would entitle it to an award of attorney's fees.

We will sustain the judgment of the trial court unless there is no substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares or applies the law. Murphy v. Carron, 536 S.W.2d 30 (Mo.1976). We accept the evidence and inferences favorable to the judgment and disregard all contrary evidence. Lake Cable, Inc. v. Trittler, 914 S.W.2d 431, 434 (Mo.App.1996). We generally defer to the trial court's findings of fact given the trial judge's superior ability to judge the credibility of the witnesses. Id. We independently evaluate the conclusions of law the trial court draws from its factual findings and from the admitted facts. Id.

I. Whether the Campgrounds is "Contiguous" to DCW's Lots

In its first point DCW contends that the trial court erred in concluding that platted lots 2-M-23 and 3-M-23 are not contiguous to the parcel known as the Campgrounds for assessment purposes because the Campgrounds are in fact adjacent to the lots. It asserts that the Campgrounds is contiguous to the lots under the bylaws because the bylaws specifically provide that there shall be one single assessment for contiguous lots and the bylaws refer to parcels and lots interchangeably. DCW argues that the board did not follow its own bylaws when it passed a resolution that "unplatted areas, except where previously determined, will be considered Commercial areas and not defined as a lot." It maintains that the bylaws do not distinguish between commercial and residential uses or purposes.

Section 12 (B) of the Association bylaws provides in part:

On all matters for which the membership shall be entitled to vote, there shall be one vote allowed for each parcel of property owned by any one particular member. If any one member shall own contiguous lots, he shall be allowed but one vote regardless of the number of lots so held and shall pay one single assessment thereon in the same amount as the owner of a single parcel of property. If any one member shall own two or more lots which are not contiguous, he shall be assessed for each lot so owned and shall be allowed to cast that number of votes as correspond to the number of lots so owned.

(emphasis added).

Corporate articles and bylaws are to be construed according to general rules governing contracts. Boatmen's First Nat. Bank v. Southern Missouri Dist. Council of the Assemblies of God, 806 S.W.2d 706, 714 (Mo.App.1991). Contract language is ambiguous when there is uncertainty as to its meaning and it is fairly susceptible to more than one meaning so that reasonable persons may fairly and honestly differ on construction of its terms. Clampit v. Cambridge Phase II Corp., 884 S.W.2d 340 (Mo.App.1994).

The word "lot" has an indefinite meaning and must be interpreted in light of the context and subject matter. Land Title Ins. v. Eisenhauer, 625 S.W.2d 208, 211 (Mo.App.1981). The bylaws use but do not define "lot" or "parcel". However, it is clear, after considering the bylaws as a whole, that parcel is used broadly and includes "lots". "Lots" are a class of "parcel".

The broad use of parcel is evident from the following bylaw provisions. Sections 5(A) and 5(B) of the bylaws establish membership rights with respect to the owners of all parcels of real property in the subdivision. Section 12(B) allows one vote for each parcel of property owned by any one particular member. Section 8(F) provides that the board has the authority to "approve or disapprove proposed purchasers or other transfers in accordance with the provisions set forth in the Covenants and Restrictions of Sale of parcels by the Big River Lakes Development Corporation, Inc." (emphasis added).

Section 12(B) is the only provision which refers to lots. It provides that contiguous lots be treated as one parcel for both voting and...