Tomhegan Camp Owners Ass'n v. Murphy

• Decision Date: 16 February 2000
• Citation: 754 A.2d 334,2000 ME 28
• Parties: TOMHEGAN CAMP OWNERS ASSOCIATION v. Robert MURPHY et. al.
• Court: Maine Supreme Court

754 A.2d 334

2000 ME 28

TOMHEGAN CAMP OWNERS ASSOCIATION v. Robert MURPHY et. al.

Supreme Judicial Court of Maine.

Argued January 6, 2000.

Decided February 16, 2000.

Anthony P. Shusta II, (orally), Madison, for plaintiff.

Stephen P. Beale, (orally), Skelton, Taintor & Abbott, P.A., Auburn, for defendants.

Before WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER and CALKINS, JJ.

CALKINS, J.

[¶ 1] Robert and Cynthia Murphy appeal from the judgment of the Superior Court (Somerset County, Marsano, J.), entered after a nonjury trial, granting damages and injunctive relief to Tomhegan Camp Owners Association (TCOA). On appeal, the Murphys contend that the trial court erred in denying their motion for judgment as a matter of law on the grounds that TCOA was acting ultra vires and that TCOA failed to join a necessary party. We affirm the judgment.

I. FACTS

[¶ 2] TCOA is a nonprofit Maine corporation with its principal place of business in Tomhegan Township in Somerset County. TCOA manages the business of the Tomhegan campground owned by its members. The property managed by TCOA consists of fourteen lots with cabins on each lot. All cabins are subject to a restrictive covenant that states in relevant part:

Each owner of a lot at Tomhegan Camps shall automatically become a member of the Tomhegan Camps Owner's Association and be subject to its By-laws. Said Association may be formed by the owners at Tomhegan Camps and shall be responsible for the maintenance of the roads, water system and pump house, and common areas shown on survey plan.

TCOA operates a central booking service through which people rent cabins at Tomhegan. TCOA collects rent from customers and disburses the rent money to the owners of the cabins.

[¶ 3] Pursuant to land installment contracts, the Murphys purchased three lots at the Tomhegan campground, each with a cabin, from Theresa Gagnon. The land installment contracts require the Murphys to pay all taxes, utility bills, insurance premiums, association fees, and assessments. Additionally, they are required to make monthly installment payments to Gagnon over varying terms for each contract. The Murphys are also required to indemnify and hold Gagnon harmless from all liability in connection with their use and occupancy of the properties during the purchase period. Legal title to the properties remains in Gagnon subject to the Murphys' interest until the full purchase price is paid.

[¶ 4] The instant case arises from the Murphys' nonpayment of assessments.¹ TCOA sent monthly statements to the Murphys demanding payment of the amounts assessed. There is no dispute that the statements were received by the Murphys and the assessments were not paid. The court found that the Murphys owe TCOA $13,485.88 in unpaid assessments. The court awarded damages to TCOA in that amount and ordered the Murphys to pay $8,000 as reimbursement for TCOA's attorney fees.² The court also granted a permanent injunction barring the Murphys or their tenants from using any of the common areas of the campground so long as the assessments remain unpaid.

II. ULTRA VIRES

[¶ 5] At the close of TCOA's case in chief, and again at the close of all the evidence, the Murphys argued that TCOA did not have standing to bring the case because, as a nonprofit corporation, it acted ultra vires when it distributed rent money to the owners of the cabins. In Maine, the defense of ultra vires in regard to a nonprofit corporation is available only under the narrowly prescribed circumstances contained in 13-B M.R.S.A. § 203 (1981).³ One of those circumstances is a proceeding brought by a member against the corporation to enjoin unauthorized acts, see § 203(1)(A), and the Murphys argue that as members of TCOA they could seek to enjoin TCOA from continuing with unauthorized acts. They did not, however, by counterclaim or otherwise, seek to enjoin TCOA, nor did they raise an affirmative defense of ultra vires. They do not come within the circumstances described in section 203(1), and the defense of ultra vires is unavailable to them.

[¶ 6] To the extent that the Murphys claim that TCOA lacks standing or the capacity to sue, they are incorrect. To have standing a party must demonstrate a particularized injury, see Christy's Realty Ltd. Partnership v. Town of Kittery, 663 A.2d 59, 61 (Me.1995),

which is met when the case directly affects the party's property, pecuniary, or personal rights, see New England Herald Dev. Group v. Town of Falmouth, 521 A.2d 693, 695 (Me.1987). TCOA has a direct pecuniary interest in the litigation because it is seeking to collect unpaid assessments. Capacity to sue is the ability of an entity to maintain an action in the courts. Cf. Gulick v. Board of Envtl. Protection, 452 A.2d 1202, 1202-03 n. 1 (Me.1982) (requiring statutory authorization before an entity has the capacity to sue). TCOA, as a registered nonprofit Maine corporation, has specific statutory authorization to sue and be sued. See 13-B M.R.S.A. § 202(1)(B) (1981). The trial court did not err in denying the Murphys' motion for judgment as a matter of law on the grounds of ultra vires, standing or capacity.

III. FAILURE TO JOIN A NECESSARY PARTY

[¶ 7] The Murphys also contend that the trial court erred in refusing to grant judgment to them for nonjoinder of a necessary party pursuant to M.R. Civ. P. 19(a).⁴ They contend that the court could not afford complete relief in this case because Theresa Gagnon, the legal holder of title to the Murphy properties at Tomhegan, was not joined as a necessary party. The Murphys have failed to demonstrate why Gagnon is a necessary party. Gagnon has no...