{
  "id": 11913273,
  "name": "RICHLAND RUN HOMEOWNERS ASSOCIATION, INC. Plaintiff, v. CHC DURHAM CORPORATION, f/k/a TIMCO, INC., f/k/a/ DURHAM CORPORATION, f/k/a/ RICHLAND PROPERTIES, INC. and CAPITAL HOLDING CORPORATION, Defendants",
  "name_abbreviation": "Richland Run Homeowners Ass'n v. CHC Durham Corp.",
  "decision_date": "1996-08-06",
  "docket_number": "No. COA94-1392",
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    "judges": [
      "Judge WYNN concurs.",
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    "parties": [
      "RICHLAND RUN HOMEOWNERS ASSOCIATION, INC. Plaintiff, v. CHC DURHAM CORPORATION, f/k/a TIMCO, INC., f/k/a/ DURHAM CORPORATION, f/k/a/ RICHLAND PROPERTIES, INC. and CAPITAL HOLDING CORPORATION, Defendants"
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      {
        "text": "McGEE, Judge.\nAlthough the order of the trial court purports to be a dismissal of plaintiffs claims, because the court considered matters outside of the pleadings, the order is actually a grant of summary judgment for defendants. A motion to dismiss for failure to state a claim is converted to a N.C.R. Civ. P. 56 motion for summary judgment when matters outside of the pleadings are presented to and not excluded by the trial court. Stanback v. Stanback, 297 N.C. 181, 205, 254 S.E.2d 611, 627 (1979). In this case, the order clearly shows the court considered the affidavits submitted by the parties in making its decision. Since the affidavits were not incorporated by reference into the pleadings pursuant to N.C.R. Civ. P. 10(c), the affidavits are matters outside of the pleadings. Consideration by the trial court of the parties\u2019 affidavits and supporting documents converted the motion to dismiss into a motion for summary judgment.\nPlaintiff suffered no prejudice by treating the motion to dismiss as one for summary judgment. Defendants filed their motion and supporting affidavit in May 1994. Since the court did not hear the motion until August 1994 and because the motion specifically stated the grounds upon which defendants sought relief, plaintiff had ample time to prepare to defend the motion and present supporting evidence. Plaintiff did in fact file two supporting affidavits and accompanying documents. Further, by attending and participating in the hearing without objection or without requesting a continuance, plaintiff waived any right to object to the summary judgment hearing on the ground of lack of notice. Raintree Corp. v. Rowe, 38 N.C. App. 664, 667-68, 248 S.E.2d 904, 907 (1978).\nBecause the court\u2019s order acted as a grant of summary judgment for defendants, on appeal this Court must affirm if there are any grounds upon which to sustain the granting of summary judgment. Shore v. Brown, 324 N.C. 427, 428, 378 S.E.2d 778, 779 (1989). After reviewing the record, we find there are grounds to sustain the granting of summary judgment and affirm.\nI.\nThe trial court held that: \u201cPlaintiff\u2019s complaint . . . fails to state claims upon which relief can be granted in that Plaintiff failed to comply with all conditions precedent to maintaining the alleged causes of action against Defendants.\u201d The applicable statute of repose for plaintiff\u2019s cause of action is six years. N.C. Gen. Stat. \u00a7 l-50(5)(a). This statute is substantive in nature and requires as a condition precedent that a plaintiff establish that the action has been brought within the six-year period. Sink v. Andrews, 81 N.C. App. 594, 597, 344 S.E.2d 831, 833 (1986). This Court has held that under North Carolina law, statutes of repose are conditions precedent which must be specially pled pursuant to N.C.R. Civ. P. 9(c). Tipton & Young Construction Co. v. Blue Ridge Structure Co., 116 N.C. App. 115, 118, 446 S.E.2d 603, 605 (1994), affirmed per curiam, 340 N.C. 257, 456 S.E.2d 308 (1995). If a plaintiff does not aver compliance with a condition precedent, such as a statute of repose, then the plaintiffs case is insufficient as a matter of law. Id.\nPlaintiff failed to allege in its complaint when the last act or omission of defendants or substantial completion of the construction of the condominiums occurred. Plaintiff also failed to allege that the last act or omission or substantial completion of the construction, whenever it occurred, occurred within six years prior to the filing of this action. However, plaintiff argues in its brief that even if the action was filed outside of the six-year statute of repose, this case falls within the exception contained in G.S. l-50(5)(d). Nevertheless, plaintiff also failed to specially plead in its complaint any grounds to show the exception applied in this case or any other grounds to show the six-year statute of repose should not apply. Under this Court\u2019s holding in Tipton, because plaintiff failed to specially plead that its action was brought within the applicable statute of repose, plaintiffs cause of action is insufficient as a matter of law.\nII.\nThe trial court also held that: \u201cPlaintiff has further failed to show that it has standing to assert its claims against Defendants.\u201d\n\u201c[I]t is elementary that the substantive issues cannot be considered unless the party raising them has the capacity to do so.\u201d Property Owners\u2019 Assoc. v. Current and Property Owners\u2019 Assoc. v. Moore, 35 N.C. App. 135, 136, 240 S.E.2d 503, 505 (1978). If a party is not a natural person, it must affirmatively allege its legal existence and capacity to sue. N.C.R. Civ. P. 9(a). Evidence in the record and presented to the trial court shows the plaintiff was incorporated in October 1985 under the name of \u201cRichland Run Condominium Association, Inc.\u201d as a homeowners association for Richland Run Condominiums. As stated in the declaration establishing the condominium, and because of the date of incorporation, the association is governed by N.C. Gen. Stat. \u00a7 47A-1 et. seq., commonly known as the \u201cUnit Ownership Act\u201d (the Act). Under the Act, any cause of action relating to common areas and facilities is to be brought by \u201cthe manager or board of directors, in either case in the discretion of the board of directors, on behalf of two or more of the unit owners, as their respective interests may appear . . . .\u201d N.C. Gen. Stat. \u00a7 47A-26.\nIn construing who may bring an action under the Act, this Court has said:\nWhere the legislature has specifically designated certain statutory procedures, it has by implication excluded other procedures. To hold . . . that the statutory designation of parties who may maintain an action is merely illustrative, would make the statutory designation meaningless and contrary to both its implication and the rule of strict construction. This is especially so since the corporation here exists by virtue of statute and operates under the statutory scheme established by G.S. Chapter 47A ....\nLaurel Park Villas Homeowners Assoc. v. Hodges, 82 N.C. App. 141, 143, 345 S.E.2d 464, 465-66, disc. review denied, 318 N.C. 507, 349 S.E.2d 861 (1986) (citation omitted). As in Laurel Park, we find nothing in plaintiff\u2019s articles of incorporation and bylaws giving the homeowners association the power to bring this action. The bylaws give the board of directors the power to \u201cenforce by any legal means or proceedings\u201d the provisions of the bylaws and articles of incorporation and to \u201chir[e] attorneys and other professionals.\u201d The bylaws do not address whether the plaintiff association has the power to bring an action such as the cause of action in this case. Nor has plaintiff alleged other grounds which might give the homeowners association standing in this case. Therefore, the Act controls and only the board of directors or the manager, not the homeowners association, may bring this action on behalf of the aggrieved property owners. See Laurel Park, 82 N.C. App. at 143-44, 345 S.E.2d at 465-66 (where plaintiff homeowners association has not been given power to bring suit, association has not alleged it owned any land, association has not alleged that the action is maintained by its board of directors or manager, and no aggrieved owners are involved, association has no standing and action must be dismissed).\nPlaintiff argues it could have cured the lack of standing if the trial court had granted its motion to amend the complaint. We disagree. The motion to amend and the proposed amended complaint show that had the motion been granted, the caption and body of the complaint would reflect plaintiffs true corporate name. However, the plaintiff homeowner\u2019s association, even under its true name, would not have been the real party in interest. \u201cThe real party in interest is the party who by substantive law has the legal right to enforce the claim in question.\u201d Insurance Co. v. Walker, 33 N.C. App. 15, 19, 234 S.E.2d 206, 209, disc. review denied, 293 N.C. 159, 236 S.E.2d 704 (1977).\nNotwithstanding the fact that plaintiff\u2019s proposed amendment would not have cured its lack of standing, plaintiff argues in its brief that it should have been allowed to amend its complaint pursuant to N.C.R. Civ. P. 17 to reflect the real party in interest, and that the amendment \u201cwould have included all information about the parties and their organizational history that became clear following the hearing.\u201d (emphasis added). Rule 17 states, in part:\nNo action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest....\nN.C.R. Civ. P. 17(a). However, based on the facts of this case, the trial court did not err by refusing to allow plaintiff to amend the complaint.\nPlaintiff originally alleged in its complaint that it was incorporated in 1989 under N.C. Gen. Stat. \u00a7 47C-1-101 et. seq., commonly known as the \u201cNorth Carolina Condominium Act.\u201d Under N.C. Gen. Stat. \u00a7 47C-3-102(4), a homeowners association may institute litigation in its own name regarding matters affecting the condominium. However, as discussed above, the evidence showed plaintiff was actually incorporated in 1985 under the Unit Ownership Act, which requires that litigation be instituted by the association\u2019s board of directors or manager. Upon discovering this information, defendants filed their motion to dismiss. One of the grounds for the motion was that \u201ca homeowner\u2019s association is not the real party in interest to the claims asserted in the complaint and is not authorized to bring this action.\u201d Therefore, when the motion was filed and served, plaintiff was on notice of defendants\u2019 objection to plaintiff\u2019s capacity to bring this action.\nRule 17 requires that a party have a reasonable time after an objection to substitute or join the real party in interest. Here, plaintiff had almost three months from the filing of the motion until the hearing to attempt to substitute the real party in interest. Plaintiff did attempt to amend the complaint to reflect its true name and date of incorporation. However, none of the proposed amendments addressed the question of the real party in interest, and in fact, the proposed amended complaint continued to allege that plaintiff was incorporated under the North Carolina Condominium Act rather than the Unit Ownership Act. N.C. Gen. Stat. \u00a7 47C-l-102(a) states that the North Carolina Condominium Act only applies to condominiums created after 1 October 1986. The evidence shows plaintiff was created in October 1985. Likewise, the affidavits and materials submitted to the trial court by plaintiff show that plaintiff was governed by the Unit Ownership Act. Based upon defendants\u2019 objection to plaintiff\u2019s capacity to bring this action, combined with plaintiff\u2019s possession of its own bylaws and articles of incorporation, plaintiff could have and should have discovered in the three months between the motion and the hearing that its board of directors was the party with standing to bring this action. Plaintiff\u2019s argument that this information and plaintiff\u2019s organizational history \u201cbecame clear after the hearing\u201d rings hollow. Therefore, under the facts of this case, plaintiff had a reasonable time to substitute the real party in interest as required by Rule 17. When plaintiff failed to attempt to correct the problem after a reasonable time, the court did not abuse its discretion by granting defendants\u2019 motion. Further, plaintiff\u2019s right to amend the complaint terminated upon entry of judgment. See Johnson v. Bollinger, 86 N.C. App. 1, 7, 356 S.E.2d 378, 382 (1987) (plaintiff\u2019s right to amend terminates upon dismissal unless judgment is set aside or vacated under Rule 59 or Rule 60).\nBecause we find that plaintiff did not specially plead compliance with a condition precedent and also had no standing to bring this action, we do not reach the issues of whether the trial court properly found that plaintiff\u2019s claims were barred by the applicable statutes of limitation and repose. For the reasons stated, the order of the trial court is affirmed.\nAffirmed.\nJudge WYNN concurs.\nJudge GREENE dissents.",
        "type": "majority",
        "author": "McGEE, Judge."
      },
      {
        "text": "Judge Greene\ndissenting.\nI disagree with the majority that the trial court correctly dismissed the complaint on the basis that the plaintiff failed to specifically plead compliance with the applicable statute of repose. Our courts have repeatedly held that the plaintiff has the burden of proving \u201cthe condition precedent that its cause of action is brought\u201d within the period of the applicable statute of repose. Chicopee, Inc. v. Sims Metal Works, Inc., 98 N.C. App. 423, 426, 391 S.E.2d 211, 213, disc. rev. denied to defendants and allowed to plaintiff, 327 N.C. 426, 395 S.E.2d 674 (1990), appeal by plaintiff withdrawn, 328 N.C. 329, 402 S.E.2d 826 (1991); see e.g., Bolick v. American Barmag Corp., 306 N.C. 364, 370, 293 S.E.2d 415, 420 (1982). I do not read Rule 9(c) as requiring the pleading of conditions precedent. Indeed this Court has specifically held that Rule 9(c) only \u201cauthorizes and encourages the general averment of conditions precedent.\u201d Plemmons v. City of Gastonia, 62 N.C. App. 470, 475, 302 S.E.2d 905, 908, disc. rev. denied, 309 N.C. 322, 307 S.E.2d 165 (1983); see 1 G. Gray Wilson, North Carolina Civil Procedure \u00a7 9-4 (2d ed. 1995) (hereinafter Wilson) (conditions precedent more properly classified as Rule 8(c) affirmative defenses). I am aware of the language in Tipton & Young Constr. Co. v. Blue Ridge Structure Co., 116 N.C. App. 115, 118, 446 S.E.2d 603, 605 (1994), aff\u2019d per curiam, 340 N.C. 257, 456 S.E.2d 308 (1995), which states that \u201cstatues of repose are conditions precedent which must be specially pled.\u201d The cases cited by the Tipton court in support of that statement, however, only support the principle that statues of repose are conditions precedent and that the plaintiff has the burden at trial of proving that the claim is brought within the appropriate statue of repose. Furthermore, the statement made in Tipton was not necessary for the resolution of that case and thus obiter dictum in that the Court held that the plaintiff \u201chas not produced any evidence of compliance with\u201d the statute of repose. Id. at 119, 446 S.E.2d at 605. In any event, even if Rule 9(c) is construed to require pleading of the condition precedent, the complaint, through certain exhibits attached, alleges that the condominium complex was completed in 1986. Construing the complaint liberally, see Wilson \u00a7 9-4 (\u201ccourts should be hesitant to enforce [Rule 9(c)] strictly\u201d), the allegations sufficiently comply with Rule 9.\nThere is the separate question of which statute of repose applies. The plaintiff argues that section 1-50(5) (d) applies so as to create an exception to the six year statute (section 1-50(5) (a)) and gives rise to a ten year statute of repose pursuant to section 1-52(16). The majority refuses to address this argument on the basis that the plaintiff \u201cfailed to specially plead in its complaint any grounds to show [that section l-50(5)(d)] applied in this case.\u201d Again, I do not agree. The plaintiff has the burden of proving that the exception applies but there is no requirement that this be pled. Even if there is such a requirement, I believe that when the complaint is construed liberally, the facts supporting use of the exception have been sufficiently pled.\nFinally I also disagree that dismissal of the complaint was proper on the grounds that the claim was not brought in the name of the real party in interest. Rule 17(a) expressly states that \u201c[n]o action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection.\u201d N.C.G.S. \u00a7 1A-1, Rule 17(a) (1990). When a case is not brought in the name of the real party in interest \u201cthe court should refuse to deal with the merits of the case until the absent parties are brought into the action, and in the absence of a proper motion by a competent person, the defect should be corrected by ex mero mo tu ruling of the court.\u201d Booker v. Everhart, 294 N.C. 146, 158, 240 S.E.2d 360, 367 (1978). \u201cThis provision is designed to avoid \u2018needless delay and technical disposition of a meritorious action.\u2019 \u201d Wilson \u00a7 17-8, at 349 (quoting N.C.G.S. \u00a7 1A-1, Rule 17 comment). Pursuant to Rule 17, the trial court should have either corrected the plaintiffs error itself or refused to hear the motion for summary judgment until the real party in interest was substituted for plaintiff. I would reverse and remand to give the real party in interest an opportunity to join or be substituted as a party plaintiff.",
        "type": "dissent",
        "author": "Judge Greene"
      }
    ],
    "attorneys": [
      "Wyrick, Robbins, Yates & Ponton, L.L.P., by Samuel T. Wyrick, III, Roger W. Knight, Bruce C. Johnson, and Lee M. Whitman, for plaintiff-appellant.",
      "Wyche & Story, by N. Hunter Wyche, Jr. and Claire B. Casey, for defendant-appellees."
    ],
    "corrections": "",
    "head_matter": "RICHLAND RUN HOMEOWNERS ASSOCIATION, INC. Plaintiff, v. CHC DURHAM CORPORATION, f/k/a TIMCO, INC., f/k/a/ DURHAM CORPORATION, f/k/a/ RICHLAND PROPERTIES, INC. and CAPITAL HOLDING CORPORATION, Defendants\nNo. COA94-1392\n(Filed 6 August 1996)\n1. Limitations, Repose, and Laches \u00a7 152 (NCI4th)\u2014 failure to plead compliance with statute of repose \u2014 action insufficient as matter of law\nBecause plaintiff failed to specially plead that its action was brought within the applicable statute of repose, plaintiffs cause of action is insufficient as a matter of law.\nAm Jur 2d, Limitation of Actions \u00a7\u00a7 463 et seq.\n2. Housing, and Housing Authorities and Projects \u00a7 52 (NCI4th)\u2014 plaintiff not real party in interest \u2014 failure to correct by amendment \u2014 summary judgment for defendant proper\nThe \u201cUnit Ownership Act,\u201d N.C.G.S. \u00a7 47A-1 et seq., applied in this case so that only the board of directors or the manager, not the homeowners association, could bring this action on behalf of the aggrieved property owners; furthermore, plaintiff had almost three months from the filing of defendant\u2019s motion to dismiss for lack of standing to sue and the hearing to attempt to substitute the real party in interest but failed to do so.\nAm Jur 2d, Condominiums and Co-Operative Apartments \u00a7\u00a7 1-7.\nJudge Greene dissenting.\nAppeal by plaintiff from order entered 9 September 1994 by Judge Henry W. Hight, Jr. in Wake County Superior Court. Heard in the Court of Appeals 14 September 1995.\nPlaintiff-appellant Richland Run Homeowners Association, Inc. (true name \u201cRichland Run Condominium Association, Inc.\u201d) filed this action 20 April 1994 in an attempt to recover from defendants for alleged defective materials and improper installation of siding used in the construction of the Richland Run Condominiums. Defendants moved to dismiss the complaint on the grounds of: 1) insufficiency of service of process; 2) the claims were barred by the applicable statutes of limitations and repose; 3) no such corporation by the name of \u201cRichland Run Homeowners Association, Inc.\u201d was listed in the records of the Secretary of State; and 4) a homeowners association was not a real party in interest and had no standing to bring the action. In support of the motion, defendants filed the affidavit of Joel Brown, former president of Richland Properties, Inc.\nAfter service of defendants\u2019 motion, plaintiff moved to amend the caption and body of its complaint to reflect its true corporate name. Plaintiff later withdrew this motion and filed a second motion to amend the complaint to reflect its true name and to also add an allegation that Richland Properties, Inc. was the initial seller of the common areas of the Richland Run Condominiums. In support of its second motion and in opposition to defendants\u2019 motion to dismiss, plaintiff filed the affidavits of Julien Rattelade, community manager for Richland Run Condominiums, and Robert Speed, a civil engineer who inspected the siding. Attached to the affidavits were plaintiff\u2019s articles of incorporation and bylaws, the declaration of condominium, various correspondence between the parties, and a copy of Speed\u2019s inspection report.\nThe trial court heard all pending motions of the parties on 22 August 1994. After considering the motions, pleadings, affidavits of record, and the arguments of the parties, the trial court granted defendants\u2019 motion to dismiss with prejudice in an order entered 9 September 1994. The court found, in part, that: 1) plaintiff\u2019s claims were barred by the applicable statutes of limitations; 2) plaintiff failed to comply with all conditions precedent to maintaining its cause of action; 3) plaintiff failed to show it had standing to assert its claims against defendants; and 4) plaintiff\u2019s motion to amend its complaint was brought with undue delay, was futile, and constituted a repeated failure to cure defects. From the order dismissing its claims, plaintiff appeals.\nWyrick, Robbins, Yates & Ponton, L.L.P., by Samuel T. Wyrick, III, Roger W. Knight, Bruce C. Johnson, and Lee M. Whitman, for plaintiff-appellant.\nWyche & Story, by N. Hunter Wyche, Jr. and Claire B. Casey, for defendant-appellees."
  },
  "file_name": "0345-01",
  "first_page_order": 379,
  "last_page_order": 387
}
