Just. Holdings v. Glade Springs Vill. Prop. Owners Ass'n

• Court: West Virginia Supreme Court
• Writing for the Court: BUNN, Justice
• Citation: 906 S.E.2d 216
• Docket Number: 22-0002
• Decision Date: 15 June 2023
• Parties: JUSTICE HOLDINGS, LLC, Plaintiff Below, Petitioner, v. GLADE SPRINGS VILLAGE PROPERTY OWNERS ASSOCIATION, INC., Defendant Below, Respondent.

906 S.E.2d 216

JUSTICE HOLDINGS, LLC, Plaintiff Below, Petitioner,

v.GLADE SPRINGS VILLAGE PROPERTY OWNERS ASSOCIATION, INC., Defendant Below, Respondent.

No. 22-0002

Supreme Court of Appeals of West Virginia.

Submitted: April 25, 2023

Filed: June 15, 2023

Syllabus by the Court

1. "A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Syllabus point 3, Aetna, Casualty & Surety Co. v. Federal Insurance Co. of New York, 148 W. Va. 160, 133 S.E.2d 770 (1963).

2. "Summary judgment is appropriate if, from the totality of the evidence presented, the record could not lead a rational trier of fact to find for the nonmoving party, such as where the nonmoving party has failed to make a sufficient showing on an essential element of the case that it has the burden to prove." Syllabus point 2, Williams v. Precision Coil, Inc., 194 W. Va. 52, 459 S.E.2d 329 (1995).

3. Based on the plain language of the statute, when an association terminates a contract "without penalty" under West Virginia Code § 36B-3-105, that termination ends the parties’ rights and responsibilities at the time of the termination.

4. Termination pursuant to West Virginia Code § 36B-3-105(ii) is prospective, such that amounts previously and properly paid by an association under the contract cannot be recouped by the association. The plain language of the statutory termination provision dictates that the contract ends, at the option of the association, without penalty to the association.

5. "Although our standard of review for summary judgment remains de novo, a circuit court’s order granting summary judgment must set out factual findings sufficient to permit meaningful appellate review. Findings of fact, by necessity, include those facts which the circuit court finds relevant, determinative of the issues and undisputed." Syllabus point 3, Fayette County National Bank v. Lilly, 199 W. Va. 349, 484 S.E.2d 232 (1997), overruled on other grounds by Sostaric v. Marshall, 234 W. Va. 449, 766 S.E.2d 396 (2014).

Appeal from the Circuit Court of Raleigh County, The Honorable Robert A. Bumside, Judge, Civil Action No. 19-C-481

Shawn P. George, Esq., Jennie O. Ferretti, Esq., George & Lorenson, Charleston, West Virginia, Attorneys for the Petitioner

Bryan N. Price, Esq., William J. Aubel, Esq., Flaherty Sensabaugh Bonasso PLLC, Charleston, West Virginia, Arie M. Spitz, Esq., Clayton T. Harkins, Esq., Dinsmore & Shohl LLP, Charleston, West Virginia, Attorneys for Amicus Curiae, Elmer Coppoolse, James Terry Miller, and B. Elaine Butler

Mark A. Sadd, Esq., Ramonda C. Marling, Esq., Lewis Gianola PLLC, Charleston, West Virginia, Attorneys for the Respondent

BUNN, Justice:

Petitioner Justice Holdings, LLC ("Justice Holdings"), appeals numerous orders of the Circuit Court of Raleigh County concerning the Glade Springs Village ("GSV") community. For many years, Justice Holdings, as the developer of GSV, controlled the Glade Springs Village Property Owners Association, Inc. (the "Association") and selected the Association’s Board of Directors (the "Board"). In 2019, instead of a Board selected solely by Justice Holdings, the GSV lot owners elected the Board. This appeal emerges from ongoing litigation between Justice Holdings and the Association.¹ While Justice Holdings raises many assignments of error on appeal, its arguments focus on three issues: (1) whether the circuit court erred in finding that the Uniform Common Interest Ownership Act (the "Uniform Act"), Chapter 34B of the West Virginia Code, applied to GSV; (2) whether the circuit court erred in granting summary judgment to the Association on its declaratory judgment action seeking a determination that a loan had been terminated with no equitable remedies; and (3) whether the circuit court erred in finding that Justice Holdings owed funds to the Association, including more than $6 million in assessments to the Association and a reimbursement of a payment related to the loan.

We conclude, as explained below, that the circuit court correctly determined that the Uniform Act applied to GSV. We further conclude that the circuit court, while it improperly expanded the impact of its holding, did not err when it granted summary judgment regarding the termination of the Association’s loan with Justice Holdings. Finally, with respect to the assessments and other funds, we reverse, in part, vacate, in part, and remand those issues to the circuit court, because the order is insufficient to allow us to conduct adequate appellate review.²

I. FACTUAL AND PROCEDURAL HISTORY

Glade Springs Village ("GSV") is a residential development established in May 2001 when Cooper Land Development ("Cooper Land"), as the developer, recorded the 2001 GSV Declaration ("GSV Declaration" or "Declaration") in the Office of the Clerk of the County Commission of Raleigh County, West Virginia. In conjunction with the creation of GSV, Cooper Land also created the Glade Springs Village Property Owners Association, Inc. (the "Association"), a nonprofit corporation. The GSV Declaration set forth the operating procedures for the development, including the developer’s responsibilities, the Association’s duties, and the Association’s members’ responsibilities.

Initially, the Declaration bound only one acre of land owned by Cooper Land. The Declaration contemplated a residential and commercial community with utility systems, recreational facilities, and common properties for the use and benefit of the community. At the time Cooper Land created GSV, Glade Springs Resort already existed and included a housing development known as "Phase I." Some lots in Phase I, as well lots in another nearby development called "The Farms," eventually became associated with GSV.

In 2010, Justice Holdings purchased Cooper Land’s interests and succeeded it as the developer of GSV.³ Cooper Land transferred several unsold lots to Justice Holdings, along with reserved land and its rights as the developer under the Declaration. Cooper Land also conveyed its interest in a Utilities Loan between the Association and Cooper Land, described in more detail below.

A. The Uniform Act

To understand the facts, legal issues, and parties’ roles, we provide a brief introduction to the Uniform Act, a comprehensive law that applies to certain "common interest communities" in West Virginia. See § 36B-2-101 (eff. 1986). A "common interest community" is "real estate with respect to which a person, by virtue of his ownership of a unit, is obligated to pay for real estate taxes, insurance premiums, maintenance or improvement of other real estate described in a declaration…." W. Va. Code § 36B-1-103(7). The four articles of the Uniform Act in Chapter 36B of the West Virginia Code set forth detailed rights and responsibilities of parties involved in creating, developing, and owning property in common interest communities. See W. Va. Code §§ 36B-1-101 to 36B-4-120. A common interest community is created "only by recording a declaration executed in the same manner as a deed" which "must be recorded in every county in which any portion of the common interest community is located…." W. Va. Code § 36B-2-101(a). While the Act provides for annual assessments of unit owners, except in certain limited situations, common expenses "must be assessed against all the units" by an allocation in the declaration, W. Va. Code § 36B-3-115, and the allocations "may not discriminate in favor of units owned by the declarant or an affiliate of the declarant," W. Va. Code § 36B-2-107(b). The Legislature provided that the Uniform Act "applies to all common interest communities" created within West Virginia after July 1, 1986. See W. Va. Code § 36B-1-201. Unless expressly provided by the Uniform Act, the Act’s provisions "may not be varied by agreement, and rights conferred may not be waived." W. Va. Code § 36B-1-104. Furthermore, "[a] declarant may not act under a power of attorney, or use any other device, to evade the limitations or prohibitions of [Chapter 36B of the West Virginia Code] or the declaration." Id.

B. The GSV Declaration

The GSV Declaration provided that the Association was "authorized, but not obligated, to provide any and all municipal-type services" to the common areas of GSV. The Declaration also directed that the "cost of installation of water and wastewater mains and fire hydrants to serve the Lots and homes" were to be paid from Association assessments and from charges to lot owners at the utility rates.⁴ The Declaration additionally authorized the Association to set and collect assessments, described further below.

The Declaration also provided that a Board of Directors (the "Board") managed the Association. Class membership determined control of the Board: every person or entity who owned a lot in the development had "Class A" membership in the Association, while the developer had "Class B" membership. The developer, with its Class B membership, was "solely entitled to appoint the members" of the Association’s Board until either the developer sold its "remaining inventory" and "its active sales and marketing effort is discontinued" or when the developer "in its sole discretion" converted its membership into Class A membership. Once the developer converted its membership, the Class A members, including the developer and lot owners, elected the directors.

The Declaration required lot owners to pay annual assessments and special assessments to the Association. Annual assessment funds promoted "recreation, health, safety and welfare" of the owners and the Association used those funds for the "construction, leasing, improvement and maintenance of properties, services and facilities devoted to this purpose and related to the use and enjoyment" of the common property of GSV.⁵ The Declaration provided that the annual assessment also paid for improvements at...