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Friends of Crooked Creek, L.L.C v. C.C. Partners, Inc.

Court of Appeals of North Carolina

July 18, 2017

FRIENDS OF CROOKED CREEK, L.L.C.; MARK BERTRAND; DONNA BERTRAND; SYLVIA T. TERRY; ROBERT F. ZAHN; and MICHELLE R. ZAHN, Plaintiffs,
v.
C.C. PARTNERS, INC. and CROOKED CREEK GOLF LAND LLC, Defendants.

          Heard in the Court of Appeals 15 May 2017.

         Appeal by plaintiffs from order entered 5 August 2016 by Judge G. Wayne Abernathy in Wake County, No. 15 CVS 7979 Superior Court.

          Law Offices of F. Bryan Brice, Jr., by Matthew D. Quinn, for plaintiff-appellants.

          Parker Poe Adams & Bernstein LLP, by Russell B. Killen, Jamie S. Schwedler and Michael J. Crook, for defendant-appellees.

          TYSON, Judge.

         Friends of Crooked Creek, L.L.C., Mark and Donna Bertrand, Sylvia T. Terry, and Robert F. and Michelle R. Zahn ("Plaintiffs") appeal from an order denying their motion for summary judgment and granting summary judgment in favor of Defendants. We affirm.

         I. Background

         In 1992, C.C. Partners, Inc. ("C.C. Partners") purchased a tract of real property situated in Fuquay-Varina, North Carolina and sub-divided portions of the property into single-family residential lots. C.C. Partners intended for the Crooked Creek subdivision to be developed as a golf course community, and retained a portion of the property to construct a golf course. C.C. Partners did not dedicate or convey the un-subdivided areas to the lot owners or the homeowner's association, or designate the areas as common area.

         In 1992 and 1993, C.C. Partners recorded two plats of the subdivision, which showed the creation of residential lots. Although the construction of a golf course was contemplated by C.C. Partners on its retained property, neither of these plats depicts a golf course. The plats did not set forth any indication that the property retained by C.C. Partners was to be restricted to a golf course, or a perpetual amenity or common area for the benefit of the lot owners. The plats depict golf-themed street names, such as "Tee Box Court" and "Shady Greens Drive."

         The 1992 plat contains Note 6, which states and reserves: "Lots fronting golf course shall allow limited access to property to retrieve golf balls and or complete maintenance as required to facilitate play by golfers . . . ." The plat recorded in 1993 contains Note 6 and a new Note 5, which states and reserves: "Golf course owner and developer reserve the right to encroach upon any lot for 10' on all sides if necessary for utility easement and irrigation system."

         In 1993, C.C. Partners recorded a Declaration of Covenants, Conditions and Restrictions for Crooked Creek Subdivision ("the Declaration"). The Declaration makes several references to a proposed golf course, which are set forth and discussed infra.

         In 1994, C.C. Partners recorded plats showing the creation of additional residential lots. None of these plats depict or label any area for a golf course, or contain any indication that the retained property was to be a perpetual amenity or common area to either benefit the lot owners or be maintained by C.C. Partners. The plats include Notes 5 and 6, as stated above, as well as new Note 11, which states and reserves: "Lots fronting golf course shall allow golf course encroachment up to 50 feet from rear or side lot lines to facilitate golf course construction and play." The subsequent plats also contain these Notes, although their designated numbers vary from plat to plat.

         From 1992 to March 1995, C.C. Partners sold lots to builders, who sold the lots to homeowners. C.C. Partners began construction of a golf course on a portion of the original tract in 1993.

         C.C. Partners and subsequent developers heavily marketed the subdivision as a "golf course community" with an "18-hole golf course." For example, a marketing brochure stated the "[i]nitiation fee for membership in the Crooked Creek Golf Club will be waived for the first 20 home buyers in Crooked Creek."

         In December 1994, C.C. Partners entered into a contract to sell undeveloped portions of the Crooked Creek subdivision to MacGregor Development Company ("MacGregor"), a party unrelated to this lawsuit. The property to be conveyed consisted of twenty-four previously subdivided residential lots and five un-subdivided tracts of land.

         In preparation for the closing, C.C. Partners had a survey completed to reflect the property to be sold to MacGregor. The owners of C.C. Partners testified by affidavit that the purpose of this survey plat was to provide a legal description of the property to be sold to MacGregor.

         In February 1995, C.C. Partners recorded a plat entitled "Map of Crooked Creek Golf Course and Subdivision, " which depicts a dash-lined sketch of an 18-hole golf course, tee boxes, fairways and greens, a driving range, the clubhouse, and other golf features. The plat also depicts five bold or hard-lined boundary acreage tracts, labeled "A, " "B, " "C, " "D" and "F."

         Tracts A, B, C, D and F were conveyed to MacGregor in March 1995, and MacGregor became the developer of further residential lots in Crooked Creek. C.C. Partners remained the owner and developer of the golf course. Construction of the golf course and clubhouse was completed after the conveyance to MacGregor in March 1995.

         The deed from C.C. Partners to MacGregor references the 1995 plat, which depicts the dash-lined outline of the golf course and adjoining properties. The deed does not include any use restrictions on the property retained by C.C. Partners.

         MacGregor began to subdivide tracts A, B, C, D and F to create new residential lots and sold the lots to buyers. MacGregor was solely responsible for the marketing and sale of the lots in Crooked Creek. However, according to the deposition of C.C. Partners' plurality shareholder, C.C. Partners and MacGregor were "trying to work together . . . to sell golf and sell lots" in the years that followed the transfer of the residential lots to MacGregor.

         For example, an area inside the golf clubhouse featured advertisements and a sales center for homes for sale within Crooked Creek. Advertisements for homes for sale referenced the golf course, and promoted "golf course homesites." Around 2005, C.C. Partners issued a flyer that offered a $1, 000.00 discount on golf club initiation fees "to Crooked Creek Homeowners."

         Crooked Creek Residential Properties, LLC recorded several plat maps subsequent to C.C. Partners' 1995 conveyance of tracts A, B, C, D and F. Those maps depict subdivision of the tracts purchased by MacGregor, and show land abutting ...


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