CONLEYS CREEK LIMITED PARTNERSHIP, a North Carolina limited Partnership, and MARSHALL CORNBLUM, Plaintiffs,
SMOKY MOUNTAIN COUNTRY CLUB PROPERTY OWNERS ASSOCIATION, INC., a North Carolina nonprofit corporation, Defendant, Counter claimant, WILLIAM SPUTE, RONALD SHULMAN, and CLAUDETTE KRIZEK, Defendants, ANDMICHAEL CORNBLUM, MADELINE CORNBLUM, M&D CREEK, INC., a North Carolina corporation, CORNDERMAY PARTNERS, by and through its general partners, M&D Creek, Inc. and other unknown partners, and SMCC CLUBHOUSE, LLC, a North Carolina limited liability company, Counterclaim Defendants, ANDROBERT YOUNG, Defendant in Counterclaim of SMCC Clubhouse.
in the Court of Appeals 1 December 2016.
by Smoky Mountain Country Club Property Owners Association
from two orders entered in Swain County No. 14 CVS 238
Superior Court: (1) order entered 30 July 2015 by Judge Tanya
T. Wallace (the "Wallace Order") and (2) order
entered 26 January 2016 by Judge Marvin P. Pope, Jr. (the
"Pope Order"). Cross-appeal by SMCC Clubhouse, LLC,
from summary judgment order entered 26 January 2016 by Judge
Marvin P. Pope, Jr., in Swain County Superior Court (the
"Summary Judgment Order").
Law, PLLC, by Mark R. Sigmon and Sanford L. Steelman, Jr.,
for Conleys Creek Limited Partnership, Marshall Cornblum,
Michael Cornblum, Madeline Cornblum, M&D Creek, Inc.,
Corndermay Partners, Counterclaim
Defendants/Plaintiffs-Appellees, and SMCC Clubhouse, LLC,
W. Kilbourne, Jr., for Smoky Mountain Country Club Property
Owners Association, Inc.,
matter involves a dispute concerning a residential planned
community, Smoky Mountain Country Club ("SMCC"),
developed by members of the Cornblum family. On one side of
the dispute are members of the Cornblum family and certain
entities they manage or control. On the other side of the
dispute is the property owners' association (the
"Association") of SMCC and several members of the
Association's board of directors.
the issues on appeal concern a provision included by the
Cornblums in SMCC's declaration which provided that the
Cornblums would build and own a clubhouse and that the
Association would collect dues from the homeowners and pay
the dues to the Cornblums for the right to use the clubhouse.
This matter was commenced after the homeowners took control
of the Association's board of directors from the
Cornblums and the new board issued a letter to the community
stating that the Association would no longer collect
clubhouse dues on behalf of the Cornblums.
opinion, the association and its members are collectively
referred to as the "Association." The individual
property owners are referred to collectively as the
a planned community development in Swain County. SMCC was
established as a planned community in 1999 by Conleys Creek
Limited Partnership (the "Declarant"), one of
numerous entities involved in this matter managed by members
of the Cornblum family.
to 1999, the Swain County property owned by the Cornblums was
already partially developed, consisting of single-family
residential lots subject to the "Phase I
Declaration" and condominium-style units subject to the
"Townhouse Declaration." Some of the Cornblum
property remained undeveloped and was not subject to either
1999, the Declarant recorded a declaration (the
"Declaration" or "1999 Declaration")
which essentially formed a new planned community by merging
the residential lots and condominium-style units subject to
the Phase I and Townhouse Declarations and including
some of the undeveloped land. The 1999 Declaration was
recorded in accordance with the North Carolina Planned
Community Act (the "PCA") found in Chapter 47F of
our General Statutes. The prior declarations which controlled
the residential lots and the condominium-style units were
1999 Declaration provided that the Declarant would construct
and own a clubhouse (the "Clubhouse") which would
be available to the Homeowners for their use in exchange for
Homeowners' payment of dues (the "Clubhouse
Dues"). The Declaration further required the Association
to collect the dues and to pay the collected dues to the
Declarant. Specifically, the Declaration provided as follows:
Declarant shall grant to the Association and the Owners . . .
a perpetual nonexclusive right to use the [Clubhouse], and
each Owner, in consideration thereof, shall pay the Clubhouse
Dues to the Association, and the Association shall pay all of
the Clubhouse Dues collected . . . to Declarant. The
obligation of each Owner to pay Clubhouse Dues to the
Association shall be absolute for the entire period of time
that such Owner is an Owner . . ., and shall not be dependent
on such Owner's actual use of the [Clubhouse]. The
Association shall bill and collect the Clubhouse Dues from
each Owner . . . [and] shall pay the total collected amount
of Clubhouse dues to Declarant.
2002, the Declarant completed construction of the Clubhouse.
Thereafter, the Association collected the Clubhouse Dues from
the Homeowners and paid the collected amount to the Declarant
as required by the Declaration.
2013, the Declarant and three other entities conveyed their
interest in the Clubhouse property to another Cornblum
family-controlled entity called SMCC Clubhouse, LLC
("SMCC Clubhouse"). The Association collected
Clubhouse Dues and paid the collected amount to SMCC
Clubhouse, as required by the Declaration,  until 2014 when
control of the Association board flipped from the Cornblums
to the Homeowners.
this change in control in the Association board, the
Association sent a notice to all of the Homeowners stating
that the Association would no longer be billing or collecting
Clubhouse Dues. After the Association stopped collecting
Clubhouse Dues, approximately one-third of the Homeowners
began paying Clubhouse Dues directly to SMCC Clubhouse;
however, two-thirds chose not to do so.
one month after the Association issued the notice, the
Declarant commenced this action against the Association and
three of its directors. None of the claims asserted in the
original complaint are part of this appeal.
Association's responsive pleadings included numerous
counterclaims and added two members of the Cornblum family,
two entities controlled by the Cornblums, and SMCC Clubhouse
as defendants to the counterclaims.
Clubhouse responded to the Association's counterclaims by
asserting several reverse counterclaims against the
Association for its refusal to honor its obligation under the
1999 Declaration to collect Clubhouse Dues.
Association's counterclaims and SMCC Clubhouse's
reverse counterclaims were all dismissed in a series of three
orders of the trial court. These orders are all properly
before us on appeal.
Association appeals from the Wallace Order, in which the
trial court dismissed several of its counterclaims. The
Association also appeals from the Pope Order, in which the
trial court dismissed its remaining counterclaims. SMCC
Clubhouse cross-appeals from the Summary Judgment Order, in
which the trial court dismissed SMCC Clubhouse's reverse
counterclaims against the Association. We address the appeal
and the cross-appeal in turn.
Appeal by the Association from Dismissal of Counterclaims
Association first appeals from the trial court's Rule
12(b)(6) dismissal of several paragraphs of its counterclaim.
We affirm in part and reverse in part.
considering a motion to dismiss pursuant to Rule 12(b)(6) our
Rules of Civil Procedure, this court must conduct a de
novo review of the pleadings to determine whether, as a
matter of law, "the allegations state a claim for which
relief may be granted." Skinner v. E.F. Hutton &
Co., 314 N.C. 267, 269-70, 333 S.E.2d 236, 238 (1985).
Wallace Order, the trial court dismissed four of the
Association's prayers for relief - Nos. 4, 7, 13 and 14 -
based on its conclusion that the counterclaims supporting
these prayers for relief were barred by a statute of repose.
Specifically, the trial court stated as follows:
[P]ursuant to the Statute of Repose contained in N.C. Gen.
Stat. § 47F-2-117(b), Plaintiffs and Counterclaim
Defendants' Motion to Dismiss in part is GRANTED.
Paragraphs 4, 7, 13, and 14 of the Prayer for Relief in the
[Association's] Second Amended and Restated Counterclaim
challenging the validity of an amendment to the Declaration
are dismissed in their entirety.
that the Association has not contested the dismissal of