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Little Mountain Community Association, Inc. v. The Southern Columbia Corp.

Superior Court of Pennsylvania

May 1, 2014

LITTLE MOUNTAIN COMMUNITY ASSOCIATION, INC. AND DONALD R. RHODES, Appellee
v.
THE SOUTHERN COLUMBIA CORP., Appellant

Appeal from the Order December 28, 2012 in the Court of Common Pleas of Columbia County, Civil Division at No.: 1398-CV-2012. Before NORTON, J.

Paul J. Toner, Philadelphia, for appellant.

John A. Mihalik, Bloomsburg, for appellees.

BEFORE: PANELLA, J., OLSON, J., and PLATT, J.[*] OPINION BY PLATT, J.

OPINION

Page 1192

PLATT, J.

Appellant, The Southern Columbia Corp. (Southern Columbia), appeals by permission from the order overruling four of its five preliminary objections to the complaint of Appellees, Little Mountain Community Association, Inc. and Donald R. Rhodes.[1] Appellees chiefly seek to replace

Page 1193

Southern Columbia in ownership and operation of roads and another common facility [2] for Mystic Mountain Estates, with Little Mountain, as a mandatory unit owners' association under the Uniform Planned Community Act (also referred to as UPCA, or the Act).[3] We are constrained to conclude that the trial court, in overruling the first preliminary objection, and in its overarching analysis, misinterpreted the retroactivity provisions of the UPCA. Accordingly, we vacate in part and remand.

There is no substantial dispute about the facts directly relevant to our review.[4] The parties stipulated to most of them in an extended colloquy at the hearing held on December 4, 2012. (See N.T. Hearing, 12/04/12, at 8-19; see also Appellant's Brief, at 6 (stating " dispositive facts were not in dispute" ); Appellees' Brief, at 2 (noting stipulation at hearing, while also referring to allegations from complaint)).

Appellant Southern Columbia is the successor developer and declarant of Mystic Mountain Estates, a residential subdivision in Columbia County begun in 1972, with the first lot sold in 1974.[5] (See Trial Ct. Op., 12/28/12 at 1). Mystic Mountain Estates is comprised of 423 lots,[6] of which 224 have been sold. Little Mountain is a self-proclaimed community association. (See Complaint, 9/27/12, at -12 ¶ ¶ 1-4; 8 ¶ 46). Mr. Rhodes, a half-time resident at Mystic Mountain Estates with a fifty percent beneficial interest in three lots by virtue of a living trust, is Little Mountain's treasurer.[7]

Page 1194

Little Mountain does not have an ownership interest in any of the lots.

The warranty deed for each purchaser of a lot at Mystic Mountain included thirteen restrictive covenants otherwise referred to as " Real Estate Development, Construction & Management Restrictions" (Restrictions). (See " Defendant's Preliminary Objections to Plaintiffs' Complaint," 10/18/12, at Exhibit 2). Each warranty deed, including the Restrictions, was recorded. In pertinent part, the Restrictions provided that Appellant Southern Columbia would assess various fees on an annual basis for maintenance and snow removal on community roadways. Each Grantee (Buyer) agreed to the " conditions and charges which shall be required to maintain those necessary community services[.]" (Id. at unnumbered pages 2-3 ¶ 8). The Restrictions were designated " covenants running with the land[.]" (Id. at unnumbered page 3 ¶ 10).

The Restrictions made provision for a permissive assignment, (" may at any time be assigned" ), by Appellant Southern Columbia of its " rights and obligations" to a " three-member governing commission" elected on a " one-lot, one-vote basis" " when The Southern Columbia Corp. no longer owns a majority of the total number of lots in or planned for the Mystic Mountain Estates subdivision[.]" (Id. at unnumbered page 4 ¶ 13). There was no other procedure designated for a transfer, voluntary or compulsory, of the maintenance services or the corresponding assessments.

Little Mountain was incorporated in 2011. On September 27, 2012, Appellees Little Mountain and Mr. Rhodes filed a complaint against Appellant Southern Columbia. The complaint alleged, inter alia, defective maintenance of the roadways, and that there was no capital reserve account set aside by Appellant for future contingent expenses; it demanded an accounting of the fees collected, and sought a transfer of title ownership of the common facilities to itself. Chiefly, Appellees claimed a right to relief under the Uniform Planned Community Act, (see Complaint, at 11-12 ¶ 66; 13 ¶ 70; 16-17 ¶ ¶ 99-103), and the Restatement (Third) Property (Servitudes), (see id. at 10, ¶ ¶ 62-65; 17-19 ¶ ¶ 104-26). The complaint also cited various legal theories.[8]

Appellant filed preliminary objections. Briefly summarized, the first four objections challenged the standing of both Appellees to bring suit under the UPCA, demurred to the complaint as legally insufficient, and claimed failure to join all lot owners as necessary parties. (See Defendant's Preliminary Objections to Plaintiffs' Complaint, 10/17/12, at 4-11 ¶ ¶ 25-66). Specifically, Appellant first objected to Little Mountain's standing as a " Homeowners Association" under section 6.3 of Restatement (Third) Property (Servitudes), and under the UPCA. (Preliminary Objections, at 4-7). Secondly, Appellant objected that the complaint was legally insufficient under Pa.R.C.P. 1028(a)(4). (See id. at 7-8). Third, Appellant objected that Mr. Rhodes lacks standing because he was not the title owner of the units by which he claimed beneficial interest. (See id. at 8-10). Fourth, Appellant objected to Appellees' failure to join all necessary parties, under Pa.R.C.P. 1028(a)(5). (See id. at 10-11). The last preliminary objection challenged Appellees' claim to attorneys' fees. (See id. at 11-12).

The trial court held a hearing on December 4, 2012. After the hearing and argument, the trial court overruled the first four preliminary objections and sustained the fifth one, the objection to attorneys'

Page 1195

fees.[9] (See Order, 12/28/12, at 1-2). Appellant filed a combined motion for reconsideration and request to certify the case for interlocutory appeal, on January 8, 2013. As already noted, on January 22, 2013, the court signed an order certifying its prior order for interlocutory appeal. (See Order, 1/23/13). This timely appeal followed.[10]

Appellant presents one question for our review:

I. Whether the trial court committed an error of law when it concluded that the UPCA can be " retroactively" applied to a " pre-UPCA" planned community in conflict with existing common deed covenants so that a planned community organized before the enactment of the UPCA can be forcibly reorganized into a planned community controlled by a newly formed unit owners association controlled by a minority of lot owners?

(Appellant's Brief, at 4) (quotation marks in original).

Appellant argues that the trial court's conclusion that the Uniform Planned Community Act can be applied retroactively to the facts and issues in this case conflicts with the plain ...


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