Marino v. Clary Lakes Homeowners Ass'n, Inc.

• Decision Date: 12 July 2013
• Docket Number: No. A13A0299.,A13A0299.
• Citation: 747 S.E.2d 31,322 Ga.App. 839
• Parties: MARINO, et al. v. CLARY LAKES HOMEOWNERS ASSOCIATION, INC.
• Court: Georgia Court of Appeals

322 Ga.App. 839

747 S.E.2d 31

MARINO, et al.

v.CLARY LAKES HOMEOWNERS ASSOCIATION, INC.

No. A13A0299.

Court of Appeals of Georgia.

July 12, 2013.

Julie Ann Liberman, Atlanta, for Appellant.

Cynthia Carson Hodge, Brendan R. Hunter, John T. Lueder, Alpharetta, for Appellee.

BARNES, Presiding Judge.

Clary Lakes Homeowners Association, Inc. (the “Association”) brought this action for damages and injunctive relief seeking to enforce a restrictive covenant, which concerned the parking of vehicles in garages and the use of garages for storage, against homeowners Joseph and Patricia Marino. The Marinos filed an answer and counterclaims, acknowledging that they were in violation of the restrictive covenant but contending that the Association's enforcement action and the covenant were invalid on several grounds. Following discovery, the trial court denied the Marinos' motion for summary judgment and granted in part the Association's cross-motion for summary judgment. The trial court determined that the Association's enforcement action was not barred by the two-year statute of limitation; that the restrictive covenant was exempt from the written consent requirement imposed by OCGA § 44–5–60(d)(4); that the covenant was validly enacted and enforceable against the Marinos under the Georgia Property Owners' Association Act (the “POA Act” or the “Act”), OCGA § 44–3–220 et seq.; that the Marinos were estopped from challenging the validity and enforceability of the covenant; that there was no evidence that the Association's denial of the Marinos' request for a variance was arbitrary, capricious, or done in bad faith; and that the Association rather than the Marinos was entitled to attorney fees under the “prevailing party” provision of the neighborhood covenants. The Marinos now appeal from the trial court's summary judgment order.

For the reasons discussed below, we conclude that for the restrictive covenant at issue to be enforceable against the Marinos, they had to agree to the covenant in writing pursuant to OCGA § 44–5–60(d)(4), or the covenant had to be approved by at least two-thirds of the votes in the Association pursuant to OCGA § 44–3–226(a) of the POA Act. Because the uncontroverted evidence shows that neither condition was met in this case, the restrictive covenant was unenforceable against the Marinos, and the trial court erred in concluding otherwise. Consequently, we reverse the trial court's grant of summary judgment to the Association, and its denial of summary judgment to the Marinos, on the Association's claims for damages and injunctive relief predicated on the alleged breach of the restrictive covenant, and we remand the case with direction for the trial court to enter summary judgment in favor of the Marinos on those claims. We likewise reverse the trial court's grant of summary judgment to the Association on its claim for attorney fees, but we affirm the denial of summary judgment to the Marinos on their competing claim for attorney fees because a ruling on the fees issue would be premature at this point in the litigation.

To prevail at summary judgment under OCGA § 9–11–56, the moving party must demonstrate that there is no genuine issue of material fact and that the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law. OCGA § 9–11–56(c). A defendant may do this by showing the court that the documents, affidavits, depositions and other evidence in the record reveal that there is no evidence sufficient to create a jury issue on at least one essential element of plaintiff's case. If there is no evidence sufficient to create a genuine issue as to any essential element of plaintiff's claim, that claim tumbles like a house of cards. All of the other disputes of fact are rendered immaterial.

(Emphasis omitted.) Lau's Corp. v. Haskins, 261 Ga. 491, 405 S.E.2d 474 (1991). With these principles in mind, we turn to the record in the present case.

The Original and Amended Declaration. The record shows that the original declaration of covenants for the Clary Lakes subdivision was recorded on August 7, 1987 in the Cobb County, Georgia land records (the “Original Declaration”). The Association, previously known as the Clary Lakes Recreation Association, Inc., was charged with enforcing the protective covenants contained in the Original Declaration. Among other protective covenants, Paragraph 17 of the Original Declaration provided: “Garages may be attached or detached, but must be large enough to accommodate at least two automobiles and garage interiors shall be sheetrocked and painted.” The Original Declaration did not contain any covenants requiring owners to park their vehicles in their garages and did not restrict garages from being used for storage.

The Original Declaration was amended from time to time over the years, including in 1988, 1991, 1992, and 1998. The 1998 amendment to the Original Declaration included a new Paragraph 22, which provided that any further amendment would require the approval of a majority of the members of the Association.

From 2001 to 2003, there were general discussions in the neighborhood about further changes to the Original Declaration. Ultimately, a majority of the owners and Association members voted for and approved an Amended and Restated Declaration of Protective Covenants for Clary Lakes (the “Amended Declaration”) and Amended and Restated Bylaws of Clary Lakes Homeowners Association, Inc. (the “Bylaws”). The Amended Declaration and Bylaws were recorded on October 14, 2003 in the Cobb County land records. The Amended Declaration included a provision stating that the Association and the Clary Lakes subdivision were submitting to application of the POA Act.

The Amended Declaration replaced the Original Declaration in its entirety. One of the new provisions contained in the Amended Declaration, which is at the center of the present litigation, involved the parking of vehicles in garages and the use of garages for storage. Specifically, Section 11(i) of the Amended Declaration provided:

Garage Parking. All vehicles owned or used on a regular basis by Owners or Occupants shall be parked in garages to the extent that garage space is available and vehicles fit in the garage. Garages shall not be used for storage on a regular basis so that they become unavailable for parking cars therein. The Covenant Committee shall have the power to grant a variance to any Owner or Occupant who demonstrates special circumstances why he cannot comply with this requirement. Application for this variance must be made in writing to the Covenant Committee. The variance to the Owner or Occupant must be in writing and specify the term of the required variance.

(the “Garage Use Covenant”).

The Marinos. The Marinos purchased their home in the Clary Lakes subdivision in 1994, when Paragraph 17 of the Original Declaration provided the only restriction on garages. Because their home did not have a basement, the Marinos used their garage for storage space and parked their cars in the driveway, as permitted by the Original Declaration.

After the recording of the Amended Declaration in October 2003, the Marinos continued to use their garage for storage and to park their cars in the driveway in violation of the Garage Use Covenant. The Marinos did not vote in favor of the Amended Declaration and never gave their written consent to the Amended Declaration, including the Garage Use Covenant.

In January 2009, the Association's Covenant Committee issued a “Notice of Covenant Violation” letter to the Marinos regarding their violation of the Garage Use Covenant. The Marinos responded by submitting a written appeal to the Association's Appeals Committee. The Appeals Committee came to a decision that a violation of the Garage Use Covenant had occurred but granted the Marinos a temporary variance to allow them time to come into compliance. The Marinos requested a permanent variance from the Garage Use Covenant, but their request was denied. Ultimately, the Association, pursuant to the terms of the Amended Declaration, began to levy daily fines against the Marinos for violating the Garage Use Covenant on September 1, 2010. The Marinos refused to pay the fines, which continued to accrue.

On April 15, 2011, the Association commenced this suit for damages, injunctive relief, and attorney fees, alleging, among other things, that the Marinos had been and remained in violation of the Garage Use Covenant and owed fines that had continue to accrue since September 1, 2010. The Marinos filed an answer, raising several defenses and counterclaims. The Marinos admitted that they used their garage for storage and parked their vehicles in their driveway but asserted that the Association's enforcement action was barred by the two-year statute of limitation; that the Garage Use Covenant was unenforceable against them because they had not given their written consent to it under OCGA § 44–5–60(d)(4) and it had not been approved by at least two-thirds of the votes in the Association under the POA Act; and that the Association's denial of their request for a permanent variance had been arbitrary, capricious, and done in bad faith. Like the Association, the Marinos sought attorney fees.

The parties filed cross motions for summary judgment. The trial court ruled that the uncontroverted evidence of record showed that the Association's enforcement action was not barred by the two-year statute of limitation; that the Garage Use Covenant was not subject to either the written consent requirement imposed by OCGA § 44–5–60(d)(4) or the two-thirds voting requirement imposed by the POA Act; and that the Association's denial of the Marinos' request for a permanent variance had not been arbitrary, capricious, or done in bad faith. Accordingly, the trial court denied summary judgment to the Marinos and granted summary judgment to the Association on its claims for damages for...