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Alan R. Rybarchyk, Terri Skladany, Francis Piraino, Barbara Piraino v. Pocono Summit Lake Property

July 24, 2012

ALAN R. RYBARCHYK, TERRI SKLADANY, FRANCIS PIRAINO, BARBARA PIRAINO, RUDOLPH MACHARIK, JOYCE BITTROLFF, MALCOLM WOROB, JOYCE ROSS, ARTHUR BROMBACHER, CYNTHIA BROMBACHER, EDWARD LANIGAN, NORMAN WICK, DENNIS NEMETH, IDA NEMETH, HARRY HAGEN, DIANNE HAGEN, GENEIEVE ARGEN, LAURIE WAGNER, RAYMOND BARR, RICHARD LAKE, JOAN LAKE, MARIE EDELMAN, PATRICIA O'NEIL, DELORES WIRTZ, FLORENCE RYAN, RICHARD CARNICOM, REIKO CARNICOM, HARRY HARTSHORN, CRYSTAL VAN WHY, IDRIZ MUJOVIC, KUJTIM MUJOVIC, MARY MAHON, ERIK REGAN, LYNDA REGAN, DAVID JACOBS, BARBARA JACOBS, FRANK MCDONALD, PATRICIA MCDONALD, MARGARET MOSLOSKIE AND CHRISTOPHER CORTIER
v.
POCONO SUMMIT LAKE PROPERTY OWNERS ASSOCIATION, INC., APPELLANT



The opinion of the court was delivered by: Anne E. Covey, Judge

Submitted: June 15, 2012

BEFORE: HONORABLE BERNARD L. McGINLEY, Judge

HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE ANNE E. COVEY, Judge

OPINION BY JUDGE COVEY

Appellant, Pocono Summit Lake Property Owners Association, Inc. (Association), seeks review of the Court of Common Pleas of Monroe County's (trial court) December 5, 2011 order granting declaratory judgment in favor of Alan R. Rybarchyk, Terri Skladany, Francis Piraino, Barbara Piraino, Rudolph Macharik, Joyce Bittrolff, Malcolm Worob, Joyce Ross, Arthur Brombacher, Cynthia Brombacher, Edward Lanigan, Norman Wick, Dennis Nemeth, Ida Nemeth, Harry Hagen, Dianne Hagen, Geneieve Argen, Laurie Wagner, Raymond Barr, Richard Lake, Joan Lake, Marie Edelman, Patricia O'Neil, Delores Wirtz, Florence Ryan, Richard Carnicom, Reiko Carnicom, Harry Hartshorn, Crystal Van Why, Idriz Mujovic, Kujtim Mujovic, Mary Mahon, Erik Regan, Lynda Regan, David Jacobs, Barbara Jacobs, Frank McDonald, Patricia McDonald, Margaret Mosloskie and Christopher Cortier (Appellees), prohibiting the Association from assessing and collecting any mandatory dues, fees, fines or assessments against property "unit" owners. The issues before this Court are whether the trial court erred when it concluded that: 1) Pocono Summit Lakes is not a "planned community" as defined in the Uniform Planned Community Act*fn1 (Act); 2) the Association-owned parcels were not "common facilities" as defined in the Act; 3) Appellees were not obligated to pay maintenance assessments on the properties owned by the Association; and 4) testimony regarding prior incidents of exclusion from the Association-owned parcels was properly considered. We affirm.

Pocono Summit Lakes, Inc. (Corporation) created Pocono Summit Lakes Subdivision (Subdivision) under three subdivision plans: Plotting I, Pocono Summit Lakes, Inc., 1 June 1955; Plotting II, Pocono Summit Lakes, Inc., 31 May 1956; and, Plotting III, Pocono Summit Lakes, Inc., 25 June 1957. All deeds conveyed by the Corporation contained uniform covenants and included a provision stating:

The party of the first part gives and grants to the parties of the second part, their heirs and assigns, the right and privilege of boating, bathing, fishing and ice skating in the lake of the party of the first part, known as Pocono Summit Lake No. 2, provided, however, that no boats, canoes or ice boats shall be operated upon said lake by mechanical means; nor shall any of the foregoing activities be engaged in for any commercial purpose whatsoever.

Reproduced Record (R.R.) at 79a.

The Association was formed on October 26, 1959 by a group of property owners as a Pennsylvania nonprofit corporation. At that time, the Association sought voluntary membership from the Subdivision's lot owners. In the late 1950s, the Corporation granted a group of property owners permission to construct a clubhouse which was financed from voluntary donations.

In 1960, Coolbaugh Township accepted dedication of the private Subdivision roads. As a result, all Subdivision roads are now township roads, are maintained by the township and are accessible to the public. In 1962, the Corporation conveyed to the Association three parcels of undeveloped land which lead to or abut Pocono Summit Lake No. 2, and some additional residential lots to the Association. That same year, the Corporation also conveyed the Pocono Summit Lake No. 2 (Lake) to Sundance Valley Lake Corporation (Sundance) which, on August 28, 1979, conveyed the Lake to the Association.

At the time of the aforementioned conveyances, Association membership was voluntary, and no mandatory dues were imposed upon homeowners. However, in 1988 the Association commenced nine Magisterial District Court actions against property owners to collect unpaid assessments levied against property owners. Ultimately, after an appeal to the Monroe County Court of Common Pleas, and a Board of Arbitrator's decision in favor of the property owners, the Association voluntarily discontinued the matter.

In January 2009, the Association notified all property owners that it was imposing mandatory assessments of $100.00 per homeowner, $50.00 per lot owner, and late charges of $10.00. On June 25, 2009, Appellees filed a Complaint in the trial court seeking a declaratory judgment prohibiting the Association from assessing mandatory dues, fees, assessments or fines to non-member property owners. The parties stipulated to many of the facts, but at a hearing on May 26, 2011, testimony was offered regarding disputed allegations that the Association prohibited non-member property owners from using the Lake, clubhouse and beach areas. Before the trial court, the Association argued that the Subdivision is a "planned community" under the Act, that the Lake, beach and clubhouse areas are "common facilities" as defined by the Act, and as a result, the Association is authorized to collect assessments for common expenses from unit owners. The Appellees argued that the Subdivision is not a "planned community" under the Act. In support, they noted that nothing in the deeds indicated or even suggested that the developer would convey any common areas to an association. In fact, Appellees pointed out, that no "common areas" existed in the Subdivision prior to the creation of the Association in 1959. Further, Appellees argued that the Association is distinguishable from those associations authorized to collect assessments, in that it "was created and functioned as a private club for decades before unilaterally determining that it was entitled to collect dues from non-member lot owners for amenity areas that it determined to acquire from the developer unilaterally." R.R. at 12.

On December 5, 2011, the trial court granted declaratory judgment, concluding:

We find that based upon the specific facts of this case, the Association may not seek to assess dues and costs associated with the upkeep and maintenance of the beach and pavilion areas. These are owned by the Association, which is a private association formed by members who have exclusive rights and benefits of their use. They are not common areas under the definition of the [Act], and as such the ...


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