Enchanted Valley RV Resort, Ltd. v. Weese, A99A1507.

CourtUnited States Court of Appeals (Georgia)
Citation526 S.E.2d 124,241 Ga. App. 415
Docket NumberNo. A99A1507.,A99A1507.
Decision Date23 November 1999

526 S.E.2d 124
241 Ga.
App. 415

WEESE et al

No. A99A1507.

Court of Appeals of Georgia.

November 23, 1999.

Reconsideration Denied December 14, 1999.

Certiorari Denied May 5, 2000.

526 S.E.2d 126
Chamberlain, Hrdlicka, White, Williams & Martin, Richard N. Hubert, Atlanta, for appellants

Sorgen & Schindelar, Lawrence S. Sorgen, Hiawassee, for appellees.

526 S.E.2d 125

Mike & Mike, Inc. created and owned a recreational development in Towns County, Georgia, for sale or rent as recreational vehicle sites. Robert N. Clay became the majority shareholder and changed the corporate name to Enchanted Valley RV Park Resort, Ltd. ("Developer"), appellant-defendant. On June 1, 1993, the Developer created Enchanted Valley Property Owners Association, Inc. ("Association"). At the time of creation of the Association, bylaws were adopted by the Developer without the participation of lot owners. Previously, on November 22, 1989, a Declaration of Covenants, Conditions, and Restrictions ("CCR") for The Pasture Recreational Vehicle Park and the unadopted bylaws were recorded with the Clerk of the Superior Court, Towns County as the governing documents of the Association. Some 39 separate items of documentary evidence, including these documents, were admitted at trial but were not included in the record on appeal.

In the summer of 1996, lot owners became dissatisfied with the Developer over its statement of an annual maintenance fee, including charges for water and sewer. In the spring of 1997, Leonard Scott, then President of the Association, resigned from the board of directors [241 Ga. App. 416] of the Association, and the board appointed Bob Ellis as the interim President, leaving S. Sandra Hutchinson as Association Secretary and Director. Hutchinson was a lot owner and resident managerial employee of the Developer.

In early September 1997, the Association's annual meeting was held, with Ellis presiding. At the time for election of board members, Ellis recognized only one vote per lot owner, regardless of the number of lots owned. Clay and Hutchinson did not recognize the validity of such election. After the meeting, Ellis, acting for the board, notified Hutchinson that she had been terminated as Secretary of the Association and that she should turn over all Association records, which she refused to do on Clay's instructions.

On December 6, 1997, the Association held a special meeting to elect new Directors for 1998. Clay disputed the election results on the basis that the bylaws were not followed and that there was no validation of the proxies, which were tabulated in determining the election results. The Developer owned 92 lots and claimed the right to cast 184 votes. Lot owners Steve Weese, David Wilson, and Jack Anderson were elected President, Vice-President, and Secretary/Treasurer and members of the board of directors of the Association ("Officers").

On March 26, 1998, the Officers sued the Developer, Clay, and Hutchinson for an accounting

526 S.E.2d 127
and to obtain the financial books, accounts, and records of the Association so that they could determine the Association members' assessment and pay the Developer proper fees and charges. They also sought to restrain the Developer from collecting its "Park Management Budget" from the Association and its members, which included water and sewer charges. The Developer and the other defendants answered and counterclaimed, seeking dissolution of a restraining order against Clay in Civil Action File No. 96-C.V.-0096-HS, to allow the Developer to collect service charges, including water and sewer; to disconnect services for failure to pay; and to declare the Association election void.

On August 12, 1998, after a four-day bench trial, the trial court entered its final order and judgment, which granted the Officers relief by setting the amount to be paid for water and sewer services for each lot, ordering the surrender of the Association's financial records, and validating the election. The defendants moved for a new trial. The trial court denied the motion. The defendants filed their notice of appeal. On December 14, 1998, the trial court granted a supersedeas that denied the defendants the right to sue to collect maintenance fees and charges for water and sewer or from terminating such services for non-payment. Held:

1. In their first enumeration of error, the defendants contend that the trial court erred in failing to grant the motion to dismiss. We do not agree.

[241 Ga. App. 417] The defendants contend that the December 6, 1997 election was not in compliance with the bylaws. However, neither the bylaws nor copies of other documentary evidence were sent to this Court as part of the record from the court below.

(a) The trial court had the bylaws in evidence and took judicial notice of Civil Action File No. 97-C.V.-061-HS; in Civil Action File No. 97-C.V.-061-HS the trial court determined that the recorded declaration of CCR bound all property owners and gave one vote to each lot owner. Such judgment was affirmed by this Court in Enchanted Valley RV Park Resort v. Enchanted Valley Homeowners Assn., 232 Ga.App. XXVII (1998). Thus, the doctrine of res judicata prohibits the relitigation of the one lot/one vote issue.

(b) The defendants sought to assert the rights to two votes per lot under bylaws created at the time the Association came into existence long after the sale of lots and the CCR. The Association, however, received corporate status after the filing of the declaration. Such bylaws conflicted with the CCR, because the CCR gave only one vote per lot owner. The provisions under the CCR control, because the one vote one lot created a vested legal right. See OCGA §§ 14-3-206(b); 44-3-100(a).

(c) The vote by the Association members by proxy had authorization under OCGA § 14-3-724. Either the corporate secretary or other officer had authority to receive and to tabulate votes, and the record showed evidence that an officer received such proxies for the December 6 election. OCGA § 14-3-724(c). Since there existed a legitimate issue as to who was the Secretary, then another officer properly received and counted the votes. The votes of December 6 determined the members of the board of directors of the Association. Those directors properly appointed new officers to terms commencing January 1, 1998.

"The burden is on him who asserts error to show it affirmatively by the record." (Citations and punctuation omitted.) Hancock v. Oates, 244 Ga. 175, 176, 259 S.E.2d 437 (1979). "This cannot be done by evidentiary assertions in either the enumeration or the brief. [Cit.]" Thigpen v. Johnson, 169 Ga.App. 410, 411, 313 S.E.2d 121 (1984).

It is well established that the burden is on the party alleging error to show it by the record and that where the proof necessary for determination of the issues on appeal is omitted from the record, an appellate court must assume that the judgment below was correct and affirm.

(Citations omitted.) Bennett v. Exec. Benefits, 210 Ga.App. 429, 436 S.E.2d 544 (1993). Therefore, this Court affirms the trial court's finding [241 Ga. App. 418] that the election was valid.

526 S.E.2d 128
2. Defendants contend that the trial court erred in finding that the Developer was a water authority under the rules and regulations of the Georgia Department of Natural Resources ("DNR"), subjecting it to a trust indenture for the continued operation and maintenance of the water and sewer systems. We do not agree.
This Court[, Superior Court of Towns County,], in Towns County Superior Court Civil Action No. 97-CV-061-HS, has previously ruled ... that, under the CCR, annual assessments made against the lot owners, for water, sewer, and maintenance charges should be levied by and paid to the Association. Further, this Court found that, under the CCR, Resort Ltd. [(Developer)] owns the water and sewer systems serving the lots and is the exclusive source for such services.

Such issues were previously litigated between the parties and are subject to res judicata and collateral estoppel in this action, as found by the trial court. OCGA §§ 9-12-40; 9-12-42; Gilmer v. Porterfield, 233 Ga. 671, 212 S.E.2d 842 (1975); Fierer v. Ashe, 147 Ga.App. 446, 249 S.E.2d 270 (1978).

Based upon such previously adjudicated issues, the trial court made certain legal determinations as a matter of law, as well as certain additional findings of fact:

(1) that "[t]he [Developer] has been approved by the Georgia Department of Natural Resources (DNR) to furnish water to 224 lots"; (2) that "[n]o trust indenture exists for the continued operation and maintenance of the systems"; (3) that "in addition to reimbursement to all water and sewer maintenance expenses, [Developer] was paid 25,531.34 (over-half of the total assessments collected) as a water and sewer fee"; (4) that "[t]he water and sewer systems for the Park are designed for service to RV users and not for full time residential service. The RV owners cannot have regular flush toilets but must use marine toilets. The owners may not have dishwashers or clothes washers in their units"; (5) that "[t]he Developer is currently seeking to have the Association assess 21.00 per month, per lot, as a water and sewer fee"; (6) that "[u]nder the law of this State ... each lot owner has a quasi-easement for the provision of water and sewer services to their lots"; (7) that "[t]he Developer, or its successor or assigns, is entitled to receive `reasonable value' for the water and sewer services supplied"; and (8) that "pursuant to Georgia Department of Human Resources regulations [241 Ga. App. 419] 290-5-26.-.03, it is the Developer's responsibility to maintain and operate the on-site sewer management system in a safe and sanitary manner so as not to constitute a public health hazard or nuisance"; (9) that "[t]he Developer is operating a non-governmentally owned community

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