Howell v. Lochwolde Homeowners Ass'n, Inc.
| Decision Date | 22 June 2020 |
| Docket Number | A20A0608, A20A0609 |
| Citation | 355 Ga.App. 678,845 S.E.2d 410 |
| Parties | HOWELL v. LOCHWOLDE HOMEOWNERS ASSOCIATION, INC.; and vice versa. |
| Court | Georgia Court of Appeals |
Andrew Merritt Reilly & Smith, Paul E. Andrew, for Howell.
Blum & Campbell, Jody C. Campbell, for Lochwolde Homeowners Association, Inc.
After Mitchell Howell began construction of additional structures on his property without obtaining approval from the Architectural Review Board ("ARB") of his homeowners association, the ARB disapproved Howell's construction plans as being inconsistent with the restrictive covenants. Howell brought suit, challenging the enforceability of the covenants. Following a bench trial, the trial court found the covenants enforceable. Howell appeals, and the homeowners association cross-appeals a ruling prohibiting it from fining Howell. Because the trial court did not reach the factual or legal conclusions required to resolve this case, we vacate the order below and remand with direction.
Construed in favor of the judgment, see City Heights Condo. Assn. v. Bombara , 337 Ga. App. 679, 679, 788 S.E.2d 563 (2016), the evidence shows that the Lochwolde Homeowners Association, Inc. (the "LHA") was originally incorporated in July 1988 but that it was administratively dissolved nine years later for failure to pay the annual renewal fee; the original covenants expired in 2004.
The corporation remained dissolved until 2016, but meanwhile, beginning in 2006, owners in the development referring to themselves as the LHA undertook the drafting and recording of new covenants for the development. The proposed covenants were distributed at the October 2006 annual meeting, and at both the ensuing November special meeting and thereafter, a majority of the owners in the development voted in favor of the new "Bylaws and Declaration of Covenants, Conditions and Restrictions for Lochwolde Subdivision" (the "2007 Covenants"). The covenants were recorded in the county register the following year, and they purported to submit the LHA to the Georgia Property Owners’ Association Act (the "POAA"). Nevertheless, the owners did not reincorporate the LHA at that time even though at least one owner was aware that the LHA had been dissolved.
Howell's predecessors in title voted in favor of the 2007 Covenants, and, when they sold their property to Howell, they told both the closing attorney and Howell that there were restrictive covenants on the property and that a homeowners association existed for the development. And Howell signed a seller's disclosure indicating that the property was "subject to a Declaration of Covenants, Conditions and Restrictions." After purchasing the property, Howell paid the LHA annual dues for the first four years he owned the property. And he attended a meeting of the LHA in October 2015 where various issues were discussed, including enforcement and payment of dues and enforcement of the covenants.
In 2015, Howell began construction of additional structures on his property, including a free-standing, 26-foot high, fully insulated "tree-house" with a shingled roof and a separate lookout tower and zip line platform. Thereafter, officers of the LHA met with Howell, advised him that the structures violated the 2007 Covenants, and asked him for a copy of the plans, which Howell provided. Howell agreed to halt construction until the ARB could review the plans, but the ARB disapproved Howell's plans on the ground that they were "not consistent with the community-wide standard" as provided in the covenants. Howell requested an appeal of the ARB's decision and challenged the authority of the LHA. In May 2016, an attorney for the LHA responded that the ARB decision would stand.
The current incarnation of the LHA was incorporated on April 4, 2016. In connection thereto, the board of directors adopted a resolution in lieu of an organizational meeting, by which the board accepted and approved the Articles of Incorporation for the LHA and the Certificate of Incorporation issued by the Secretary of State. The board ratified and approved the actions of the incorporator, and it acknowledged and approved the 2007 Covenants and accepted the LHA's obligations thereunder. Finally, the board ratified and affirmed "each and every election, action, decision, and transaction undertaken by the [LHA] at any time prior to April 4, 2016 ... pursuant to its authority under the [2007 Covenants]."
Howell thereafter brought an action against the LHA, seeking an order prohibiting enforcement of the 2007 Covenants, a declaration that the 2007 Covenants did not apply to his property or that the LHA had no authority to prohibit him from the construction at issue, and attorney fees. The LHA answered and counterclaimed, seeking injunctive relief requiring Howell to cease construction and to remove the structures. The LHA also sought attorney fees and a fine against Howell of $25 for each day that Howell was in violation of the 2007 Covenants.
Following discovery and the denial of Howell's motion for summary judgment, the case was tried without a jury. The parties stipulated the basic facts and presented additional evidence. Following the trial, the court held that the fact that the LHA was not incorporated at the time the 2007 Covenants were recorded was not fatal to their viability. The court held that Howell therefore proceeded at his own peril by commencing construction of the structures without ARB approval, and that he is required to remove the structures. In Case No. A20A0608, Howell appeals these rulings. The court further held that the LHA did not have authority to adopt a resolution imposing a fine of $25 per day for covenant violations. In Case No. A20A0609, the LHA cross-appeals this ruling.
1. Howell contends the trial court erred by holding that the 2007 Covenants were enforceable for several reasons.1
We apply a de novo standard of review to any questions of law decided by the trial court; factual findings made after a bench trial shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of witnesses.
(Citation and punctuation omitted.) ALA Constr. Svcs. v. Controlled Access , 351 Ga. App. 841, 841-842, 833 S.E.2d 570 (2019).
Howell's primary argument is that because the original LHA had been administratively dissolved and therefore was only authorized to wind up its affairs, it was not authorized to create and record the 2007 Covenants, and, consequently, the covenants are not enforceable. See generally OCGA §§ 14-3-1421 (c) (); 44-3-227 (a) ("Prior to submission to [the POAA], the association shall be duly incorporated.").
But the trial court did not conclude that the original LHA created and recorded the 2007 Covenants. Rather, the trial court held that under two "savings provisions" of the POAA, the fact that the LHA was not formally incorporated in 2007 was "not fatal to the viability of the 2007 Covenants," citing OCGA §§ 44-3-232.1 and 44-3-233. We conclude, therefore, that Howell's argument is inapposite. Nevertheless, for the following reasons, we hold that the trial court failed to apply the correct law and to find facts pertaining thereto, which requires remanding the case for reconsideration.
declarant to the property owners in the development even if, such as here, the declarant fails to maintain its annual registration as a corporation. See OCGA § 44-3-232.1 (a). But to take effect, that statute requires an action in superior court by one or more owners to gain control of the association, see OCGA § 44-3-232.1 (b), and there is no evidence that such an action was ever filed. Thus, we find OCGA § 44-3-232.1 inapplicable as a matter of law.
A property owners’ association is "a corporation formed for the purpose of exercising the powers of the property owners’ association created pursuant to [the POAA]." OCGA § 44-3-221 (16). And, as shown above, "[p]rior to submission to [the POAA], the association shall be...
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