Stillwater Lakes Civic Assoc., Inc. & Stillwater Sewer Corp. v. G. Kuzni ( 2020 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Stillwater Lakes Civic Association, Inc. :
and Stillwater Sewer Corporation :
:
v. : No. 998 C.D. 2018
: Argued: December 12, 2019
George Kuzni, :
Appellant :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE P. KEVIN BROBSON, Judge
HONORABLE ANNE E. COVEY, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE BROBSON FILED: February 5, 2020
George Kuzni (Owner) seeks review of two orders of the Court of
Common Pleas of Monroe County (trial court). Both orders arise from an action by
the Stillwater Lakes Civic Association, Inc. (Association) and the Stillwater Sewer
Corporation (collectively, Appellees), seeking to collect unpaid dues, assessments,
and sewer fees, as well as attorney’s fees, from Owner. The first order, dated
March 13, 2017, granted summary judgment in favor of Appellees as to the issue of
liability, and the second order, dated June 6, 2018, awarded damages to Appellees
in the amount of $43,377.39. For the following reasons, we reverse and remand.
I. BACKGROUND
This matter concerns Owner’s properties at 2346 and 2347 Nadine
Boulevard, Coolbaugh Township, Pennsylvania (the Properties), within the housing
development known as Stillwater Lake Estates (the community). Sun Dance
Stillwater Corporation (Developer) began development of the community
in 1968 and sold the first residential lots in 1971. In 1981, Developer conveyed to
the Association, a Pennsylvania nonprofit corporation, all roads and certain
recreational facilities (including two lakes, a beach, a clubhouse, a pool, and other
facilities) within the community. In 1986, Developer conveyed either title to or an
easement in the sewer facilities in the community to Stillwater Lakes Sewer
Corporation, a wholly owned subsidiary of the Association.
Owner purchased the first of the Properties—lot 2346, on which he
maintains a residence—in 2004, and the adjoining lot 2347 in 2006. Lot 2347
contains wetlands and remains vacant. The deeds by which Owner took title to the
Properties provide that the conveyances are “subject to covenants, conditions, and
restrictions which shall run with the land as appear in the chain of title.”
(Reproduced Record (R.R.) at 71a, 75a, 77a.) Prior deeds for both of the Properties
impose identical sets of covenants and restrictions that will run with the land
(collectively, the deed covenants), including the following:
2. The purchase and ownership of subject lot does
not convey or confer upon the PURCHASER any right,
title or interest in and to the lake or lakes, stream or
streams, swimming pools, or pools, community facility
buildings, club house, ski-runs and other types of
community facilities and improvements, whether for
recreational use or not or any right, title or interest for
PURCHASER to use, occupy and enjoy said facilities,
improvements, lake or lakes, stream or streams, swimming
pool or pools, club house, ski-runs, etc., except that
PURCHASER has the right to join SELLER’s club when
same is formed and use aforesaid facilities, and until same
is formed has the right to use the aforesaid facilities,
provided that PURCHASER pays SELLER all recreation
and road maintenance charges when due and complies
2
with all rules and regulations of club when formed
[(covenant 2)].
3. PURCHASER agrees to pay to SELLER each
and every year a road maintenance and use charge for the
maintenance and use of the roads traversing the
development, and a recreation charge for maintenance and
use of recreational facilities, in such amount as the
SELLER in its sole and absolute discretion is to be paid.
In any event, the minimum yearly road maintenance and
use charge to be paid by PURCHASER shall be $20.00
[(covenant 3)].
....
19. The portion of the lands of the SELLER laid
down on the map as streets are [sic] not dedicated to public
use and title thereto shall remain in the SELLER subject
to the right to convey to another entity with reservations
and subject to the right of the PURCHASER and those
claiming under them to use the same for ingress and egress
. . . [(covenant 19)].
20. If the rear lot lines of lake and stream lots . . .
do not abut upon the physical stream or lake, then in such
case, an easement, for ingress and egress to the lake and
stream as the case may be is hereby granted by SELLER
to such lot owner commencing from the rear line of subject
lot, for the length of such rear line, to the stream or lake
[(covenant 20)].
(Id. at 103a, 118a.) A prior deed for Lot 2347 makes that lot subject to the
Declaration of Covenants, Conditions, and Restrictions of Stillwater Lake Estates,
recorded in Monroe County in deed book volume 1121, page 213 (the Declaration).1
The provisions of the Declaration are substantially similar to the deed covenants.
(See Original Record (O.R.), Item No. 52, App. F.)
1
The Declaration does not independently apply to the Properties because they are not part
of the property described in the Declaration. Accordingly, the Declaration applies to Lot 2347 but
not to Lot 2346.
3
Shortly after purchasing the first of the Properties, Owner began
receiving and paying invoices from the Association. For several years, Owner
continued to pay in full all invoices from the Association with respect to both
Properties. In 2009 or 2010, Owner wrote a letter to the managing director of NEPA
Associates, which then managed the community on behalf of the Association,
purporting to terminate any membership interest he had in the Association (the
termination letter). Either upon or shortly after the termination letter, Owner ceased
paying all invoices from the Association with respect to both Properties.
In 2013, Owner’s attorney wrote a letter to the Association concerning
several citations the Association had issued to Owner for maintaining an “unsightly
lot.” (Supplemental Reproduced Record (S.R.R.) at 55b.) In the letter, Owner’s
attorney reiterated that Owner is not a member of the Association. Counsel for the
Association responded with a letter stating that “[the Properties are] certainly located
within the boundaries of the [Association]” and that, accordingly, Owner is a
member of the Association and responsible for assessments for maintenance. (Id.
at 41b.)
On December 2, 2015, Appellees filed an action in the trial court,
seeking to collect “dues, assessments, sewer charges and various other charges,” plus
late fees, interest, and attorney’s fees from Owner for the period during which Owner
did not pay Association invoices (approximately 2011 to the present). (R.R. at 3a.)
Appellees claimed that, by virtue of his ownership of lots within the community,
Owner must be a member of the Association and is subject to the Association’s
bylaws (Bylaws), which authorize the Association to impose assessments upon
members for maintenance of common elements.
4
In anticipation of trial, Appellees secured Owner’s deposition. Owner
admitted that, during the entire period of his ownership of the Properties, he has
driven on roads owned and maintained by the Association in order to access the
Properties. Owner also testified that he paid the Association’s invoices for
assessments in full before 2011, without inquiring about the basis for the charges.
He explained that, following the termination letter, he asked the Association to give
him a separate accounting of road and sewer maintenance assessments, which he
would pay, but excluding “membership dues,” which he refused to pay. (S.R.R.
at 44b.) After the Association refused to make an itemized accounting and
demanded payment in full (and following an alleged mismanagement of one of
Owner’s previous payments), Owner made no further payments to the Association.
Owner also stated that he has gone boating on the lake adjoining his
Properties “more than 30 times” and allowed guests to fish in the lake, including
instances of boating and fishing as recently as 2014. (Id. at 29b-30b.) He testified
that he has never used other Association-owned amenities such as the clubhouse,
pool, basketball courts, and beach, but he confirmed that no one has sought to
prevent him from doing so. He stated that he has attended “a couple” meetings of
the Association, including one in an attempt to address the Association’s board
concerning the community’s sewer system. (Id. at 34b.) Owner stated that the board
did not permit him to speak and instructed the members present to “just ignore” him.
(Id. at 36b.) Owner confirmed that, although he did not attempt to vote at the
meeting, no one prevented him from doing so.
On March 13, 2017, the trial court granted summary judgment in favor
of Appellees, concluding that Owner is obligated to pay the invoiced costs. The trial
court reasoned that covenants in Owner’s chain of title require him to become and
5
remain a member of the Association and, thus, subject him to assessments. The trial
court also stated, without elaboration, that Owner admitted he is a member of the
Association2 and that the Bylaws prohibit termination of membership. For these
reasons, the trial court concluded that the Association is authorized to collect the
assessments it seeks under Section 5302(a) of the Uniform Planned Community Act
(Act), 68 Pa. C.S. § 5302(a). After granting summary judgment on the issue of
liability and holding a damages hearing, the trial court awarded Appellees damages
in the amount of $43,377.39.
II. ISSUES
On appeal,3 Owner argues that the trial court erred in granting summary
judgment. Specifically, Owner asserts that genuine issues of material fact exist with
respect to: (1) whether, under the Act and in light of the deed covenants, the
community qualifies as a planned community and the Association qualifies as a unit
owners’ association authorized to impose assessments on Owner; (2) whether Owner
is a member of, and thus subject to, the Association; (3) whether the Properties are
located in a community distinct from the community governed by the Bylaws; and
(4) whether the Declaration conflicts with the Bylaws, such that the trial court erred
in failing to apply Section 5203(c) of the Act to resolve such a conflict. Owner
further argues that, because the trial court erroneously granted summary judgment,
we must reverse its later order awarding damages.
2
We find no such admission in the record.
3
“An order of a trial court granting summary judgment may be disturbed by an appellate
court only if the court committed an error of law . . . .” LJL Transp., Inc. v. Pilot Air Freight
Corp., 962 A.2d 639, 647 (Pa. 2009). In reviewing a grant of summary judgment, we exercise de
novo review that is plenary in scope. Id.
6
Before addressing Owner’s arguments, we note that Owner “admits to
using the roads within the [community], and is prepared to pay for his proportional
share of sewer charges and for reasonable charges for maintenance of roads.” (Br.
for Appellant at 8.) Accordingly, Owner disputes only his liability for the invoiced
costs associated with the common elements of the community other than the
roadways and sewer system.
III. DISCUSSION
The Pennsylvania Rules of Civil Procedure permit summary judgment
“whenever there is no genuine issue of any material fact . . . which could be
established by additional discovery or expert report.” Pa. R.C.P. No. 1035.2. Thus,
Pennsylvania courts may grant summary judgment only “on an evidentiary record
that entitles the moving party to a judgment as a matter of law.” Toy v. Metro. Life
Ins. Co., 928 A.2d 186, 194-95 (Pa. 2007). “In considering the merits of a motion
for summary judgment, a court views the record in the light most favorable to the
non[]moving party, and all doubts . . . must be resolved against the moving party.”
Id. at 195. Thus, summary judgment is appropriate only where the right to such a
judgment is clear and free from doubt. Id. Because the existence of a genuine issue
of material fact is a question of law subject to our de novo review, we do not defer
to the trial court’s assessment of that question. Yenchi v. Ameriprise Fin., Inc.,
161 A.3d 811, 818 (Pa. 2017). Instead, we apply on appeal the same summary
judgment standard applicable in the trial court. See Gior G.P., Inc. v. Waterfront
Square Reef, LLC, 202 A.3d 845, 852 n.10 (Pa. Cmwlth.), appeal denied,
217 A.3d 1216 (Pa. 2019).
7
A. Obligation by Virtue of Ownership
Owner first argues that there exists a genuine issue of material fact
regarding whether the deed covenants require him to be a member of the Association
or otherwise require payment for recreational facilities. He points out that the deed
covenants permit voluntary membership in a “club” and do not give notice of any
mandatory unit owners’ association. He also emphasizes that the deed covenants
require payments “to SELLER,” i.e., Developer, not to the Association. He claims
that resolving these and other ambiguities in the deed covenants requires factual
determinations regarding the intended meaning of the deed covenants.
In response, Appellees argue that Owner waived the issue of ambiguity
in the deed covenants by failing to assert it explicitly in his Pa. R.A.P. 1925(b)
statement.4 In the alternative, Appellees assert that the community is a “planned
community” under the Act,5 that assessments are compulsory, and that the deed
covenants unambiguously require maintenance payments for recreational facilities,
at first to Developer and then to the Association as Developer’s successor.
1. Construction of Deed Covenants
Generally, the interpretation of a deed—including restrictive covenants
contained in a deed—is a question of law for the court. Starling v. Lake Meade Prop.
Owners Ass’n, Inc., 162 A.3d 327, 340 (Pa. 2017). “The same principles that apply
to the interpretation of a contract apply to the interpretation of a deed.” Id. at 341.
4
We find Appellees’ waiver argument unpersuasive. Owner raised in his Rule 1925(b)
statement the issue of “outstanding disputes as to relevant facts,” which includes as a subsidiary
issue factual issues regarding the meaning of the deed covenants. (R.R. at 637a);
see Pa. R.A.P. 1925(b)(4)(v) (“Each error identified in the [Rule 1925(b) s]tatement will be
deemed to include every subsidiary issue . . . which was raised in the trial court.”). Owner raised
exactly this issue before the trial court. (See O.R., Item No. 30 at 6.)
5
68 Pa. C.S. §§ 5101-5414.
8
Accordingly, the object of our interpretation is to ascertain and effectuate the
intention of the parties, viewing the language of the instrument in its entirety. In re
Conveyance of Land Belonging to City of DuBois, 335 A.2d 352, 357 (Pa. 1975);
Wilkes-Barre Twp. Sch. Dist. v. Corgan, 170 A.2d 97, 98 (Pa. 1961) (“[The parties’]
intention is to be gathered from a reading of the entire contract.”). Where the
language of the restrictive covenant is clear, “the intent of the parties should be
gained from the writing itself.” Hankin v. Goodman, 246 A.2d 658, 660 n.1
(Pa. 1968).
If, however, the language of the instrument leaves doubt about the
intended meaning of a covenant, “the court must look at the circumstances under
which the grant was made” in order to determine what the parties intended. In re
Estate of Quick, 905 A.2d 471, 474-75 (Pa. 2006) (quoting Hindman v. Farren,
44 A.2d 241, 242 (Pa. 1945)). The court may consider circumstances such as “the
situation of the parties, the objects they apparently ha[d] in view, and the nature of
the subject [] matter of the agreement.” Id. Although the existence of an ambiguity
is a legal determination for the court to make, “the resolution of conflicting . . .
evidence relevant to what the parties intended by the ambiguous provision is for the
trier of fact.” Hutchison v. Sunbeam Coal Corp., 519 A.2d 385, 390 (Pa. 1986).
Turning to the instant matter, covenant 2 clearly provides that the
conveyance of the Properties does not grant the right to use the recreational facilities
enumerated in covenant 2 (including the lake, pools, community buildings, and
clubhouse). Instead, covenant 2 allows use of those facilities only if an owner
voluntarily exercises his “right” (importantly, not his “obligation”) to join the
9
Association and becomes subject to the Association’s rules and regulations. 6 Thus,
covenant 2 implicitly creates two categories of property owners—those who are
members of the Association and those who are not. For owners who do not elect to
join the Association pursuant to covenant 2 (nonmember owners), the deed
covenants convey no right to use the listed recreational facilities.7 Importantly,
covenant 2 clearly provides that joining the Association (and acquiring the
concomitant right to use the listed recreational facilities) is optional.
The language of covenant 3 is equally clear. It requires all owners to
make two types of payments to Developer (and, by implication, its successors8) in
perpetuity: (1) a payment “for the maintenance and use of the roads traversing the
[community],” and (2) a payment “for maintenance and use of recreational
facilities.” (R.R. at 103a (emphasis added).) With respect to roads, the perpetual
6
Although covenant 2 gives owners the right to join “SELLER’s club,” this apparently
refers to the Association, as Appellees concede. This view comports with the Declaration’s
version of covenant 2, which states that “GRANTEE has the right to join the aforesaid
ASSOCIATION and use aforesaid facilities.” (O.R., Item No. 52, App. F.)
7
That analysis applies to owners who took title after the Association was formed. For
owners who took title before the Association existed, covenant 2 provides a provisional right to
use the recreational facilities subject to certain conditions, including maintenance payments to
Developer. Although the deed covenants appear to have been drafted at some time before creation
of the Association, the initial conveyances of the Properties by Developer did not occur until 1982
and 1983—at least one year after the Association was formed. Because no owners of the Properties
could have benefitted from the provisional use right, that portion of covenant 2 is not relevant to
our analysis.
8
The deed covenants “shall run with the land.” (R.R. at 102a, 107a.) Here, Developer
ultimately conveyed the roads and recreational facilities to the Association, which now enjoys the
right to benefit from the covenants benefiting those respective parcels, including covenant 3. See
Goldberg v. Nicola, 178 A. 809, 810 (Pa. 1935) (holding that grantor of covenant-benefitted
property “transferred to his grantee the same right in the covenant that he possessed, with the same
obligation imposed”). Moreover, the Declaration—recorded after Developer conveyed the roads
and recreational facilities to the Association—requires that the covenant 3 payments be made to
“the . . . Association.” (O.R., Item No. 52, App. F.)
10
maintenance and use fee is consistent with covenant 19, which gives all owners
(including nonmembers) the unqualified right to use the roads in the community.
Covenants 2 and 3, however, appear to contradict one another regarding
recreational facilities. On one hand, covenant 3 requires all owners (including
nonmembers) to pay a fee for, inter alia, “use of” the recreational facilities. On the
other hand, covenant 2 allows owners to join the Association, thereby giving them
the right to use the recreational facilities, whereas nonmembers have no such right.
Thus, covenant 3 applies the recreational facility use fee to all owners, while
covenant 2 limits use to members. In other words, covenant 3 appears to impose a
use fee on some owners who, by virtue of their nonmembership, have no right to use
the recreational facilities. Thus, the deed covenants appear to conflict. It borders on
nonsense to construe the deed covenants as requiring nonmember owners to pay a
use fee for recreational facilities which they cannot use.
Thus, reading covenants 2 and 3 together, we are hard pressed to
conjecture a “reasonable construction . . . that will accord with the intention of the
parties.” Hindman, 44 A.2d at 242 (quoting Connery v. Brooke, 73 Pa. 80, 83
(1873)). We cannot ascertain from the contradictory instrument what the parties
intended. Perhaps Developer intended to obligate all owners, including
nonmembers, to pay for maintenance of the recreational facilities, reasoning that
those facilities benefit even owners who do not use them by increasing property
values and enhancing the aesthetic appeal of the community. But that construction
ignores covenant 3’s clear language tying the payment covenant to maintenance and
use (and, thus, to voluntary membership). Alternatively, Developer might have
intended that, upon creation of the Association, only members of the Association
would pay for maintenance and use of the recreational facilities. But this view
11
ignores the recreational maintenance and use fee in covenant 3, which even
nonmember owners have clearly covenanted to pay in perpetuity.9
Neither the parties’ briefs nor a review of the record reveals any basis
upon which we could choose between these competing constructions. For example,
the Declaration retains virtually identical language, except that it removes the
provisional right to use the recreational facilities. Moreover, neither of the potential
constructions is so inequitable, unusual, or one-sided that we would, as a matter of
law, eliminate it as a possibility and adopt another. Cf. New Charter Coal Co. v.
McKee, 191 A.2d 830, 834-35 (Pa. 1963) (discussing and applying doctrine that
given one unreasonable construction and another equitable, reasonable construction,
the latter will be adopted). Extrinsic evidence is, therefore, required to determine
the proper construction of the deed covenants with respect to the nonmember
owners’ obligation to pay assessments for recreational facilities. The review,
credibility, and resolution of conflicts within that evidence are matters for the
factfinder rather than matters of law. Hutchison, 519 A.2d at 390. Accordingly, we
agree with Owner that the trial court erred in granting summary judgment when the
intention of the parties concerning the deed covenants presents a genuine issue of
material fact.10
9
In raising these two potential constructions for the purpose of analysis, we do not mean
to suggest that they are the only viable constructions.
10
We disagree, however, with Owner’s reliance on an unpublished memorandum opinion
of the United Stated District Court for the Middle District of Pennsylvania (district court) in
Collazo v. Stillwater Lakes Civic Ass’n, Inc. (M.D. Pa., No. 3:CV-99-0931, filed August 2, 2002).
Owner asserts that, in Collazo, the parties ultimately entered into a settlement agreement whereby
Collazo terminated his membership in the Association, showing that the deed covenants do not
absolutely require membership in the association or payment for recreational facilities. Collazo is
not mandatory authority, however, and it does not resolve the proper construction of the deed
covenants, which requires consideration of the circumstances surrounding the initial conveyance
of the Properties that occurred some 20 years before Collazo was decided.
12
2. Obligation Under Act
The trial court also based its grant of summary judgment on the theory
that the Act authorizes the Association to collect assessments for the community’s
common elements, including the recreational facilities. Although the community,
the Association, and the deed covenants were all created before the Act became
effective, “certain provisions of the [Act] retroactively apply to all planned
communities created before the [Act]’s effective date.” Pinecrest Lake Cmty. Tr. ex
rel. Carroll v. Monroe Cty. Bd. of Assessment Appeals, 64 A.3d 71, 74 (Pa.
Cmwlth. 2013) (emphasis omitted). We have applied the definition of “planned
community” from Section 5103 of the Act retroactively in many cases to determine
whether a pre-Act conveyance creates a planned community. See, e.g., id. at 75;
Rybarchyk v. Pocono Summit Lake Prop. Owners Ass’n, Inc., 49 A.3d 31, 35
(Pa. Cmwlth. 2012), appeal denied, 68 A.3d 910 (Pa. 2013). The Act defines
“planned community” as:
Real estate with respect to which a person, by virtue of
ownership of an interest in any portion of the real estate,
is or may become obligated by covenant, easement, or
agreement imposed on the owner’s interest to pay any
amount for real property taxes, insurance, maintenance,
repair, improvement, management, administration or
regulation of any part of the real estate other than the
portion or interest owned solely by the person . . . .
68 Pa. C.S. § 5103.
Here, given our construction of the deed covenants, it is clear that, in
the language of the Act, Owner “is . . . obligated by covenant . . . to pay [an] amount
for . . . maintenance” of, at a minimum, the roadways within the community.
Accordingly, we agree with Appellees that the Properties are part of a planned
community and are subject to the Act to the extent that its provisions apply
13
retroactively. That is not, however, the end of our inquiry, for retroactive application
of the Act “do[es] not invalidate specific provisions contained in existing provisions
of [a] declaration.” 68 Pa. C.S. § 5102(b). This protection of preexisting
arrangements, even if they are contrary to the Act’s requirements, reflects a concern
“that the application of certain organizational requirements of the [Act] to
pre[]existing planned communities could violate the constitutional prohibition
against impairment of contracts and lead to confusion among unit owners and
declarants.” Pinecrest Lake, 64 A.3d at 80.
Accordingly, Pennsylvania courts have upheld the organizational
structure of pre-Act planned communities even when the regime of underlying
covenants differs dramatically from the Act’s requirements or typical planned
community arrangements. In Pinecrest Lake, we examined a pre-Act planned
community created by a trust agreement requiring all unit owners to make payments
to the trust. We determined that an entity such as the trust need not meet the formal
requirements of Section 5301 of the Act11 to qualify as an “association.” Instead,
we examined the functional legal regime created by the trust agreement, noting that
unit owners paid dues to and were the sole beneficiaries of the trust. We concluded
that, because “the [t]rust performs the essential protective functions of an owners’
11
Section 5301 of the Act provides:
A unit owners’ association shall be organized no later than the date the first
unit in the planned community is conveyed to a person other than a successor
declarant. The membership of the association at all times shall consist exclusively
of all the unit owners or, following termination of the planned community, of all
former unit owners entitled to distributions of proceeds under [S]ection 5218 [of
the Act] (relating to easement to facilitate completion, conversion and expansion)
or their heirs, successors or assigns. The association shall be organized as a profit
or nonprofit corporation or as an unincorporated association.
(Emphasis added.) The trust in Pinecrest Lake was obviously not formally consistent with the last
sentence of Section 5301.
14
association,” the trust could constitute an “association” under the Act without
meeting the formal requirements of Section 5301. Pinecrest Lake, 64 A.3d at 80-81.
In Little Mountain Community Association, Inc. v. Southern Columbia
Corp., 92 A.3d 1191 (Pa. Super. 2014), the Superior Court went further, holding
that, because Section 5301 of the Act is not retroactive, the Act does not require the
formation of a unit owners’ association at all. Id. at 1198. The court noted that the
restrictions of record authorized, but did not require, the developer to assign
responsibility for common elements to a third party. Id. at 1194. The court held that
an organization of unit owners could not, under the auspices of the Act, force the
developer to turn over maintenance responsibilities to them when the restrictions of
record did not require the formation of an association. See id. at 1198.
In the instant case, with respect to roadways, the deed covenants impose
a mandatory requirement of payment in perpetuity, together with a perpetual right
to benefit from the roadways. Accordingly, under Pinecrest Lake, the Association
qualifies as an “association” under the Act for purposes of roadway ownership and
maintenance, and, thus, the Association may collect assessments for roadway
maintenance under Section 5302(a)(2) of the Act.12 With respect to recreational
facilities, however, the deed covenants are not clear and, once properly construed,
might create rights and obligations which, although markedly different from the
Act’s compulsory assessment regime, we would be bound to preserve. Thus,
although Appellees (and the trial court) are generally correct that the Association has
authority under the Act, we cannot agree that, as a matter of law, the Act authorizes
Section 5302(a)(2) of the Act permits “the association” to “collect assessments for
12
common expenses from unit owners.” Section 5302(a)(2) is retroactive. 68 Pa. C.S. § 5102(b).
15
the particular assessments in dispute here (i.e., those for recreational facilities).
Summary judgment was, therefore, not supported by the Act alone.
3. Obligation Under Common Law
We next consider whether, under common law, the Association may
collect mandatory recreation area assessments from Owner. The first common law
case the parties cite and discuss is Meadow Run & Mountain Lake Park Association
v. Berkel, 598 A.2d 1024, 1026 (Pa. Super. 1991), appeal denied, 610 A.2d 46(Pa. 1992), which was decided before the Act was effective. In Meadow Run, the
owner’s deed granted the right to use the community’s roads, lakes, and other
common elements. The deed also contained the following language:
In the event of the formation or incorporation of an
association of the lot owners on above[-]mentioned plot of
Mountain and Meadow Run Lakes, the occupants of the
above[-]described premises shall be bound by such rules
and regulations concerning the use of Mountain and
Meadow Run Lakes as to boating, bathing, ice skating and
fishing, as may be duly formulated and adopted by such
association or incorporation.
Meadow Run, 598 A.2d at 1026 (emphasis added). The Superior Court held that the
owner was obligated under common law to pay the assessments for the roads, lakes,
and other common elements to the association, because: (1) the owner enjoyed,
pursuant to the deed, the right to use and benefit from those areas; and (2) the deed
informed the owner that, in the future, he would necessarily become subject to the
association’s rules and regulations. Id. at 1026-27.
In Rybarchyk, the owner’s deed granted the right to access a lake in the
community. Following the community’s creation, some owners voluntarily formed
an association, which constructed a clubhouse using voluntary donations and
eventually purchased the lake from a third-party owner. Much later, the association
16
attempted to impose mandatory assessments on all unit owners in the community.
After concluding that the Act did not apply, we examined whether the association
could collect assessments under common law. We distinguished the case from
Meadow Run by noting that, although Rybarchyk’s deed granted the right to use the
lake, it did not allow use of other association amenities (such as the clubhouse,
beach, pavilion, and boat launches), which had, at times, been restricted to use by
association members only. Rybarchyk, 49 A.3d at 36-37. We also observed that,
unlike in Meadow Run, Rybarchyk’s deed contained no notice that an association
might be formed and impose binding regulations in the future. Id.
Here, because the meaning of the deed covenants remains unclear, it is
not clear whether Owner’s chain of title gives sufficient notice and use rights to bind
Owner to pay recreational assessments (as in Meadow Run) or whether Owner’s
payment obligation is based only on his voluntary membership (as in Rybarchyk).
Accordingly, the trial court erred in concluding that Owner’s “right to use the . . .
common areas in the community” compels him to “contribute to expenses” for those
areas. (R.R. at 458a.) As we have discussed, there are genuine factual questions
concerning whether the deed covenants impose such a requirement, and the trial
court erred in granting summary judgment on that basis.
B. Voluntary Membership in Association
Even if Owner’s chain of title does not require him to pay assessments
for the recreational facilities, he could have such an obligation through voluntary
membership in the Association. See Huddleson v. Lake Watawga Prop. Owners
Ass’n, 76 A.3d 68, 73 (Pa. Cmwlth. 2013) (“[N]othing . . . gives [an association] the
right to bind non[]members or make membership mandatory absent a shared
obligation.”), appeal denied, 84 A.3d 1065 (Pa. 2014). If Appellees could establish
17
that, as a matter of law, Owner voluntarily joined and remained a member of the
Association, then the trial court’s error in granting summary judgment based on the
deed covenants and the Act would be harmless. Accordingly, we now consider
whether summary judgment was warranted on the issue of voluntary membership.
Owner argues that there are genuine issues of material fact regarding
(1) whether he ever joined the Association, and (2) if he did, whether the termination
letter effectively terminated his membership. In response, Appellees argue that,
under the doctrine of equitable estoppel, Owner’s undisputed actions show he was a
member of the Association. Appellees also emphasize that Owner “did not engage
in any discovery . . . relative to . . . whether he was or was not a member,” and they
argue that Owner’s response to Appellees’ summary judgment motion failed to
identify evidence showing a genuine issue of material fact as to voluntary
membership. (Br. of Appellees at 11 n.1.)
Appellees are correct that a nonmoving party may not remain silent at
summary judgment but must, instead, identify “one or more issues of fact arising
from evidence in the record controverting the evidence cited in support of the
motion.” Pa. R.C.P. No. 1035.3(a)(1). Appellees’ summary judgment motion and
supporting brief before the trial court relied on three items in the record—Owner’s
deposition, the termination letter (which Appellees attached to the motion), and the
testimonial affidavit of the Association’s property manager. In the motion,
Appellees argued that Owner should be estopped from denying his membership in
the Association based on (1) admissions in his deposition that he paid assessments,
attended Association meetings, and used the lake for fishing and boating; and (2) his
statement in the termination letter that he was “terminating [his] membership with
the [Association],” (R.R. at 295a (emphasis added)), and his failure to assert
18
nonmembership in the termination letter. In his response and brief opposing
summary judgment, Owner argued that these facts are not sufficient to show his
membership in the Association. He specifically argued that his fishing and boating
on the lake do not reflect membership in the Association but, instead, reflect his
understanding that, pursuant to covenant 20, he enjoys easement rights to access the
lake from his lakefront property regardless of his membership in the Association.13
Owner did not specifically identify other disputed facts.
Although Owner’s response to the summary judgment motion is not
comprehensive, it was timely filed and it articulates at least one genuine dispute
about the implication of Owner’s admitted use of the lake. Even where factual
events themselves are undisputed, summary judgment is inappropriate where there
is a genuine dispute about the inferences to be drawn from the facts. See Laich v.
Bracey, 776 A.2d 1022, 1024 (Pa. Cmwlth. 2001) (requiring that, on summary
judgment, “the record and any inferences therefrom” must be viewed in the
nonmoving party’s favor (emphasis added)). Here, although Owner admits his use
of the lake, he disputes the inference that his use was based on his acquiescence in
membership in the Association. He also provided a plausible alternative inference
(that he used the lake pursuant to easement rights). The doubt created by this
dispute—squarely addressed in Owner’s response to the summary judgment
motion—must be resolved in Owner’s favor and against Appellees.14 Id.
13
The issue of whether nonmember owners of lakefront property enjoy legal rights to use
the lake, beyond an easement right for ingress and egress “to” (and from) the lake, as provided in
covenant 20, is not before this Court. Nothing in this opinion should be construed as addressing
Owner’s argument that he enjoys such rights.
14
Contrary to what Appellees appear to suggest, Pennsylvania Rule of Civil
Procedure 1035.3 does not require a nonmoving party to offer its own evidence in response to a
summary judgment motion. It simply requires that it identify evidence in the record that supports
19
We note several other facts on which Appellees rely that deserve
interpretation in Owner’s favor on summary judgment. Appellees construe Owner’s
past payment of assessments as evidence of Owner’s voluntary membership in the
Association. Owner explained in his deposition testimony, however, that he paid
the assessments as a matter of course without understanding their basis. He also
explained that he asked for a separate accounting of membership fees (as opposed
to, inter alia, road maintenance costs), and that he ceased payment when the
Association refused to provide one. Owner’s admission of liability for road and
sewer maintenance costs plausibly explains his prior payments to the Association.
This also might explain why, as Appellees emphasize, Owner attended at least two
meetings of the Association. In the only detailed testimony he gave about a meeting
he attended (but at which he did not vote and was not allowed to speak), Owner
stated that he sought to discuss sewer issues with which he would be concerned
regardless of membership.
It is the role of a factfinder “to resolve . . . conflicting inferences that
may be drawn from the facts.” Thompson v. Nason Hosp., 535 A.2d 1177, 1178-79
(Pa. Super. 1988), aff’d, 591 A.2d 703 (Pa. 1991). Here, the facts support competing
inferences, and it is likely that further discovery will assist a factfinder in
determining which inferences are credible. Additionally, under Pennsylvania’s
well-established Nanty-Glo rule,15 summary judgment cannot be supported by
its claim to a genuine issue of material fact. Here, Owner filed such a response. Moreover, we
note that even if Owner had filed no response to the motion, that failure would permit, but would
not require, entry of summary judgment. Pa. R.C.P. No. 1035.3(d) (“Summary judgment may be
entered against a party who does not respond.” (emphasis added)); Payton v. Pa. Sling Co.,
710 A.2d 1221, 1224 (Pa. Super. 1998) (“[A] trial court may, at its discretion, enter judgment
against a party that fails to respond to a summary judgment motion.”).
15
See Penn Ctr. House, Inc. v. Hoffman, 553 A.2d 900, 903 (Pa. 1989) (discussing
Nanty-Glo v. Am. Sur. Co., 163 A. 523 (Pa. 1932)).
20
testimonial evidence (i.e., depositions and affidavits) alone unless the testimony is
an admission by the nonmoving party that “conclusively establish[es] a material fact
and [is] not . . . subject to rebuttal.” DeArmitt v. N.Y. Life Ins. Co., 73 A.3d 578, 595
(Pa. Super. 2013) (emphasis added). Owner’s testimony, although an admission, is
inconclusive because it is open to competing interpretations. Owner has essentially
articulated how he would rebut Appellees’ interpretation of his testimony before a
factfinder. For this reason, the record (viewed in the light most favorable to Owner)
supports Owner’s assertion that a genuine issue of fact exists regarding whether he
was ever a member of the Association.16 Summary judgment was, therefore, not
appropriate. See Toy, 928 A.2d at 194-95.17
IV. CONCLUSION
For the foregoing reasons, the trial court erred in granting summary
judgment in favor of Appellees. Accordingly, we will reverse the trial court’s orders
and remand this matter to the trial court.
P. KEVIN BROBSON, Judge
16
We also note that there may be a genuine dispute regarding Owner’s purported
termination of membership. Owner testified that, at some point following his attempted
termination, the Association’s grievance committee acknowledged that Owner was not a member
of the Association. (See S.R.R. at 39b-41b.) Given that Appellees’ argument for Owner’s
membership sounds in equitable estoppel, a dispute about whether the Association accepted
Owner’s attempted termination or otherwise confirmed that he was not a member is material.
17
Given this determination, we do not consider Owner’s other arguments on appeal.
21
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Stillwater Lakes Civic Association, Inc. :
and Stillwater Sewer Corporation :
:
v. : No. 998 C.D. 2018
:
George Kuzni, :
Appellant :
ORDER
AND NOW, this 5th day of February 2020, the orders of the Court
of Common Pleas of Monroe County (trial court) dated March 13, 2017, and
June 6, 2018, respectively, are REVERSED, and this matter is REMANDED to the
trial court for proceedings consistent with the accompanying opinion.
Jurisdiction relinquished.
P. KEVIN BROBSON, Judge