{ "id": 4160297, "name": "WILLOW BEND HOMEOWNERS ASSOCIATION, INC., Plaintiff v. THURSTON ROBINSON and CHARLOTTE ROBINSON, Defendants", "name_abbreviation": "Willow Bend Homeowners Ass'n v. Robinson", "decision_date": "2008-09-02", "docket_number": "No. COA07-1290", "first_page": "405", "last_page": "419", "citations": [ { "type": "official", "cite": "192 N.C. App. 405" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "132 N.C. App. 347", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11237900 ], "year": 1999, "opinion_index": -1, "case_paths": [ "/nc-app/132/0347-01" ] }, { "cite": "119 N.C. App. 761", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11917590 ], "year": 1995, "opinion_index": -1, "case_paths": [ "/nc-app/119/0761-01" ] }, { "cite": "644 S.E.2d 245", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12638317 ], "year": 2007, "pin_cites": [ { "page": "246-47" } ], "opinion_index": 0, "case_paths": [ "/se2d/644/0245-01" ] }, { "cite": "611 S.E.2d 874", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12632724 ], "year": 2005, "pin_cites": [ { "page": "874" } ], "opinion_index": 0, "case_paths": [ "/se2d/611/0874-01" ] }, { "cite": "655 S.E.2d 837", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12640256, 12640257, 12640258 ], "year": 2007, "opinion_index": 0, "case_paths": [ "/se2d/655/0837-01", "/se2d/655/0837-02", "/se2d/655/0837-03" ] }, { "cite": "362 N.C. 86", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 12640256, 12640258, 12640348, 12640253, 12640254, 12640255 ], "year": 2007, "opinion_index": 0, "case_paths": [ "/se2d/655/0837-01", "/se2d/655/0837-03", "/se2d/656/0591-01", "/se2d/655/0836-01", "/se2d/655/0836-02", "/se2d/655/0836-03" ] }, { "cite": "647 S.E.2d 672", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12638974 ], "weight": 2, "year": 2007, "pin_cites": [ { "page": "674" }, { "page": "674" } ], "opinion_index": 0, "case_paths": [ "/se2d/647/0672-01" ] }, { "cite": "183 N.C. App. 249", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8202792 ], "year": 2007, "pin_cites": [ { "page": "252" } ], "opinion_index": 0, "case_paths": [ "/nc-app/183/0249-01" ] }, { "cite": "381 S.E.2d 706", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "pin_cites": [ { "page": "714", "parenthetical": "stating that a \"trial court's decision to impose or not to impose mandatory sanctions under N.C.G.S. \u00a7 1A-1, Rule 11(a) is reviewable de novo as a legal issue\"" } ], "opinion_index": 0 }, { "cite": "325 N.C. 152", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2491380 ], "year": 1989, "pin_cites": [ { "page": "165", "parenthetical": "stating that a \"trial court's decision to impose or not to impose mandatory sanctions under N.C.G.S. \u00a7 1A-1, Rule 11(a) is reviewable de novo as a legal issue\"" } ], "opinion_index": 0, "case_paths": [ "/nc/325/0152-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 6-21.1", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 }, { "cite": "577 S.E.2d 633", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2003, "pin_cites": [ { "parenthetical": "setting the standard of review for a trial court's decision to award attorney's fees under N.C. Gen. Stat. \u00a7 6-21.1" } ], "opinion_index": 0 }, { "cite": "356 N.C. 676", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 1511269, 1511307, 1511226, 1511611, 1511293 ], "year": 2003, "pin_cites": [ { "parenthetical": "setting the standard of review for a trial court's decision to award attorney's fees under N.C. Gen. Stat. \u00a7 6-21.1" } ], "opinion_index": 0, "case_paths": [ "/nc/356/0676-01", "/nc/356/0676-02", "/nc/356/0676-05", "/nc/356/0676-03", "/nc/356/0676-04" ] }, { "cite": "568 S.E.2d 230", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2002, "pin_cites": [ { "page": "236-37" } ], "opinion_index": 0 }, { "cite": "152 N.C. App. 619", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9251038 ], "year": 2002, "pin_cites": [ { "page": "629" } ], "opinion_index": 0, "case_paths": [ "/nc-app/152/0619-01" ] }, { "cite": "513 S.E.2d 331", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1999, "pin_cites": [ { "page": "333" } ], "opinion_index": 0 }, { "cite": "588 S.E.2d 891", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2003, "pin_cites": [ { "parenthetical": "noting that \"[a] real estate covenant is a contract, and parties are generally presumed to take into account all existing laws when entering into a contract\"" } ], "opinion_index": 0 }, { "cite": "357 N.C. 582", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 491429, 491686, 491731, 491481, 491708 ], "year": 2003, "pin_cites": [ { "parenthetical": "noting that \"[a] real estate covenant is a contract, and parties are generally presumed to take into account all existing laws when entering into a contract\"" } ], "opinion_index": 0, "case_paths": [ "/nc/357/0582-03", "/nc/357/0582-01", "/nc/357/0582-04", "/nc/357/0582-05", "/nc/357/0582-02" ] }, { "cite": "584 S.E.2d 731", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2003, "pin_cites": [ { "page": "739", "parenthetical": "noting that \"[a] real estate covenant is a contract, and parties are generally presumed to take into account all existing laws when entering into a contract\"" } ], "opinion_index": 0 }, { "cite": "357 N.C. 396", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 491815 ], "year": 2003, "pin_cites": [ { "page": "406", "parenthetical": "noting that \"[a] real estate covenant is a contract, and parties are generally presumed to take into account all existing laws when entering into a contract\"" } ], "opinion_index": 0, "case_paths": [ "/nc/357/0396-01" ] }, { "cite": "650 So. 2d 4", "category": "reporters:state_regional", "reporter": "So. 2d", "case_ids": [ 7441195 ], "year": 1994, "pin_cites": [ { "page": "7", "parenthetical": "noting that \"[i]f assessments cannot be enforced to pay judgments which have been entered against [a condominium] association and which can be executed against the association property, the condominium could be destroyed, to the detriment of all the owners\"" } ], "opinion_index": 0, "case_paths": [ "/so2d/650/0004-01" ] }, { "cite": "573 S.E.2d 547", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2002, "pin_cites": [ { "page": "549" }, { "page": "549" } ], "opinion_index": 0 }, { "cite": "155 N.C. App. 205", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9249637 ], "weight": 2, "year": 2002, "pin_cites": [ { "page": "207-09" }, { "page": "207-09" } ], "opinion_index": 0, "case_paths": [ "/nc-app/155/0205-01" ] }, { "cite": "460 S.E.2d 197", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1995, "pin_cites": [ { "page": "199-200" }, { "page": "199" }, { "page": "200" } ], "opinion_index": 0 }, { "cite": "291 S.E.2d 151", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "pin_cites": [ { "parenthetical": "where the plaintiff homeowners' association sued for unpaid assessments, the defendant homeowners filed a motion to dismiss under N.C. Gen. Stat. \u00a7 1A-1, Rule 12(b)(6) on the grounds that the assessment covenants were invalid" } ], "opinion_index": 0 }, { "cite": "305 N.C. 302", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568704, 8568618, 8568570, 8568763, 8568670 ], "year": 1982, "pin_cites": [ { "parenthetical": "where the plaintiff homeowners' association sued for unpaid assessments, the defendant homeowners filed a motion to dismiss under N.C. Gen. Stat. \u00a7 1A-1, Rule 12(b)(6) on the grounds that the assessment covenants were invalid" } ], "opinion_index": 0, "case_paths": [ "/nc/305/0302-04", "/nc/305/0302-02", "/nc/305/0302-01", "/nc/305/0302-05", "/nc/305/0302-03" ] }, { "cite": "284 S.E.2d 752", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1981, "pin_cites": [ { "page": "753" }, { "page": "755", "parenthetical": "holding invalid a covenant providing that assessments would be used for \"[m]aintenance and improvement of [the neighborhood] and its appearance, sanitation, easements, recreation areas and parks\"" } ], "opinion_index": 0 }, { "cite": "55 N.C. App. 199", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526960 ], "weight": 2, "year": 1981, "pin_cites": [ { "page": "200" }, { "page": "203-04" } ], "opinion_index": 0, "case_paths": [ "/nc-app/55/0199-01" ] }, { "cite": "307 S.E.2d 170", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1983, "pin_cites": [ { "parenthetical": "where the plaintiff homeowners' association sued for unpaid assessments, the defendant homeowners filed a motion for summary judgment contesting the validity of the assessment covenants" } ], "opinion_index": 0 }, { "cite": "309 N.C. 320", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4761705, 4764361, 4767598, 4764571, 4763934 ], "year": 1983, "pin_cites": [ { "parenthetical": "where the plaintiff homeowners' association sued for unpaid assessments, the defendant homeowners filed a motion for summary judgment contesting the validity of the assessment covenants" } ], "opinion_index": 0, "case_paths": [ "/nc/309/0320-03", "/nc/309/0320-04", "/nc/309/0320-05", "/nc/309/0320-01", "/nc/309/0320-02" ] }, { "cite": "303 S.E.2d 336", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1983, "pin_cites": [ { "page": "337", "parenthetical": "where the plaintiff homeowners' association sued for unpaid assessments, the defendant homeowners filed a motion for summary judgment contesting the validity of the assessment covenants" }, { "page": "341", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "62 N.C. App. 367", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8522528 ], "weight": 2, "year": 1983, "pin_cites": [ { "page": "367", "parenthetical": "where the plaintiff homeowners' association sued for unpaid assessments, the defendant homeowners filed a motion for summary judgment contesting the validity of the assessment covenants" }, { "page": "376" } ], "opinion_index": 0, "case_paths": [ "/nc-app/62/0367-01" ] }, { "cite": "269 S.E.2d 178", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 12, "year": 1980, "pin_cites": [ { "page": "287" }, { "page": "179" }, { "page": "294" }, { "page": "182" }, { "page": "297" }, { "page": "184" }, { "page": "183" }, { "page": "179, 183-84", "parenthetical": "holding invalid covenants establishing, inter alia, \"reasonable annual assessment charges for road maintenance and maintenance of the trails and recreational areas\"" }, { "page": "183" }, { "page": "183" } ], "opinion_index": 0 }, { "cite": "48 N.C. App. 286", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8550227 ], "weight": 5, "year": 1980, "pin_cites": [ { "page": "295" }, { "page": "288, 295-97" }, { "page": "295" }, { "page": "295" } ], "opinion_index": 0, "case_paths": [ "/nc-app/48/0286-01" ] }, { "cite": "170 N.C. App. 145", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9004563 ], "year": 2005, "pin_cites": [ { "page": "146" } ], "opinion_index": 0, "case_paths": [ "/nc-app/170/0145-01" ] }, { "cite": "185 N.C. App. 153", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8208915 ], "weight": 2, "year": 2007, "pin_cites": [ { "page": "156" }, { "page": "156" } ], "opinion_index": 0, "case_paths": [ "/nc-app/185/0153-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 6-21.5", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 4, "opinion_index": 0 }, { "cite": "132 N.C. App. 347", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11237900 ], "year": 1999, "pin_cites": [ { "page": "349" } ], "opinion_index": 0, "case_paths": [ "/nc-app/132/0347-01" ] }, { "cite": "119 N.C. App. 761", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11917590 ], "year": 1995, "opinion_index": 0, "case_paths": [ "/nc-app/119/0761-01" ] } ], "analysis": { "cardinality": 1031, "char_count": 33736, "ocr_confidence": 0.748, "pagerank": { "raw": 8.086842010945453e-08, "percentile": 0.4672065823142585 }, "sha256": "958ad0f93d01db6cc94f299c0011a606b65e23218b412053690f9956a4558d07", "simhash": "1:6e2cd9500c7be870", "word_count": 5232 }, "last_updated": "2023-07-14T14:54:33.452279+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges TYSON and STEPHENS concur." ], "parties": [ "WILLOW BEND HOMEOWNERS ASSOCIATION, INC., Plaintiff v. THURSTON ROBINSON and CHARLOTTE ROBINSON, Defendants" ], "opinions": [ { "text": "McGEE, Judge.\nThe record in this case shows that the Willow Bend Subdivision is a small neighborhood located in Cumberland County, North Carolina, and that it consists of eight separate lots. The Willow Bend Homeowners Association, Inc. (Plaintiff) is a nonprofit corporation incorporated on or about 26 February 1997. The Willow Bend Architectural Review Committee (ARC) is an unincorporated association that was established to approve proposed building plans in the Willow Bend Subdivision.\nThe developer of the Willow Bend Subdivision filed a \u201cDeclaration of Covenants[,] Conditions and Restrictions for Willow Bend Subdivision\u201d (the Declaration) with the Cumberland County Register of Deeds on 25 June 1998. Article IV of the Declaration provides in part:\nSection 1. . . . Personal Obligation of Assessment. . . . [E]ach Owner of any Lot by acceptance of a deed therefor, whether or not it shall be so expressed in such deed, is deemed to covenant and agree to pay the [Willow Bend Homeowners] Association:\n(1) annual assessments or charges].]\nSection 2. Purpose of Assessments. The assessments levied by the [Willow Bend Homeowners] Association shall be used exclusively to promote the recreation, health, safety, and welfare of the residents in the properties and for the improvements and maintenance of the Common Area.\nSection 3. Maximum Annual Assessment.... [T]he annual maximum assessment shall be Five Hundred and No/100 ($500.00) Dollars per Lot.\n(b) . . . [T]he annual maximum assessment may be increased ... by a vote of three-fourths (3/4) of each class of members who are voting in person or by proxy, at a meeting duly called for this purpose.\nThurston and Charlotte Robinson (Defendants) purchased a lot in the Willow Bend Subdivision in June 2003. Defendants submitted a proposed building plan for a single-family residence to the ARC in January 2005. The ARC denied approval of Defendants\u2019 building plan because the plan did not comply with setback requirements contained in the Declaration.\nAfter numerous unsuccessful attempts at amending the setback requirements, Defendants, who are African-American, filed a complaint against Plaintiff with the Fayetteville Human Relations Commission (FHRC) alleging that Plaintiff had discriminated against them on the basis of their race. Defendants also filed discrimination charges against Plaintiff with the Department of Housing and Urban Development, which referred the charges to the North Carolina Human Relations Commission (NCHRC). The FHRC found on 14 April 2005 that Plaintiff had not discriminated against Defendants. The outcome of Defendants\u2019 complaint with the NCHRC is not clear from the record. Plaintiff retained counsel to defend itself in the proceedings before the FHRC and NCHRC. As of 31 December 2005, Plaintiff had a bank balance of $153.40 and outstanding legal bills totaling $4,331.99.\nPlaintiff held a meeting on 1 January 2006 and voted seven-to-one to increase the 2006 annual assessment from $500.00 to $1,000.00 per lot to cover Plaintiffs outstanding legal bills. Defendants were the sole members of the Willow Bend Homeowners Association to vote against the assessment. Over the following months, Defendants informed Plaintiff that they \u201cexclud[ed themselves] from the group who wishe[d] to support [Plaintiff] financially\u201d in defending itself. Defendants also made numerous attempts to pay Plaintiff $500.00 to cover the original 2006 assessment. On each occasion, Plaintiff refused to accept Defendants\u2019 $500.00 payment and asked Defendants to pay the full $1,000.00 assessment.\nPlaintiff filed a small claim complaint against Defendants on 25 September 2006 to recover the $1,000.00 assessment, plus interest and attorney\u2019s fees. A judgment was entered on 19 October 2006 in Plaintiff\u2019s favor, but the judgment did not award Plaintiff attorney\u2019s fees. Defendants appealed the judgment to District Court, and Plaintiff appealed the denial of attorney\u2019s fees to District Court. Defendants filed a motion for leave to assert an answer, defenses, counterclaims, and third-party complaints in District Court on 24 January 2007. The District Court issued an order on 14 February 2007 allowing Defendants to assert defenses but denying the remainder of Defendants\u2019 motion. Defendants then filed a general denial of the allegations in Plaintiff\u2019s complaint pursuant to N.C. Gen. Stat. \u00a7 1A-1, Rule-8(b).\nPlaintiff and Defendants filed opposing motions for summary judgment on 15 and 21 March 2007, respectively. District Court Judge Kimbrell Kelly Tucker (Judge Tucker) issued an order on 24 April 2007 denying both parties\u2019 motions. This action was tried before District Court Judge John W. Dickson (Judge Dickson) on 24 April 2007. Judge Dickson determined that there were no material facts in dispute and that this action could be decided as a matter of law. Both parties agreed that Judge Dickson could decide the relevant issues as a matter of law without overruling Judge Tucker\u2019s prior order.\nAs to the merits of Plaintiff\u2019s claim, Defendants acknowledged the $1,000.00 assessment but argued that the restrictive covenants purporting to allow Plaintiff to impose the assessment were vague and unenforceable. Plaintiff responded that the assessment was proper and that the restrictive covenants were valid. Plaintiff further noted that under N.C. Gen. Stat. \u00a7 55A-3-04, Defendants were required to challenge the validity of corporate action through an injunctive proceeding. According to Plaintiff, Defendants had not challenged Plaintiffs action by an appropriate pleading, and therefore were unable to raise their argument concerning the covenants as a defense in the current case. Plaintiff also argued that it was entitled to attorney\u2019s fees under N.C. Gen. Stat. \u00a7 6-21.5 and N.C. Gen. Stat. \u00a7 47F-3-116(e).\nJudge Dickson entered an order on 25 May 2007 containing two conclusions of law that served as alternative bases for awarding judgment in Plaintiff\u2019s favor:\n1. [Defendants did not challenge, by appropriate pleading, the power of [Plaintiff] to make the disputed assessment.\n2. The Declaration ... is not vague as to the right of [Plaintiff] to assess attorney\u2019s fees, against its members, which are incurred by [Plaintiff] in defending itself and its members against claims brought against [Plaintiff].\nJudge Dickson awarded Plaintiff $1,000.00, plus interest, on its claim for the past-due assessment. However, Judge Dickson denied Plaintiff\u2019s requests for attorney\u2019s fees under N.C. Gen. Stat. \u00a7 6-21.5 and N.C. Gen. Stat. \u00a7 47F-3-116(e). Plaintiff and Defendants appeal.\nI. Defendants\u2019 Appeal\nDefendants raise three issues in their appeal. We consider each of Defendants\u2019 arguments in turn.\nA.\nDefendants first argue that the trial court erred by concluding as a matter of law that Defendants did not challenge, by appropriate pleading, Plaintiff\u2019s power to impose the disputed assessment. We review a trial court\u2019s legal conclusions de novo. See, e.g., Bruning & Federle Mfg. Co. v. Mills, 185 N.C. App. 153, 156, 647 S.E.2d 672, 674, cert, denied, 362 N.C. 86, 655 S.E.2d 837 (2007).\nThe North Carolina Nonprofit Corporation Act provides in part:\n(a) Except as provided in subsection (b) of this section, the validity of corporate action shall not be challenged on the ground that the corporation lacks or lacked power to act.\n(b) A corporation\u2019s power to act may be challenged:\n(1) In a proceeding by a member or a director against the corporation to enjoin the act[.]\nN.C. Gen. Stat. \u00a7 55A-3-04(a)-(b)(l) (2007). Defendants argue that N.C.G.S. \u00a7 55A-3-04 is inapplicable in the current case. According to Defendants, their argument is not that Plaintiff acted ultra vires in derogation of corporate by-laws, resolutions, or other corporate documents. Rather, Defendants merely challenge the validity and enforceability of the restrictive covenants at issue. Plaintiff responds that the crux of Defendants\u2019 trial defense was that Plaintiff lacked the power to impose the assessment at issue. Therefore, according to Plaintiff, N.C.G.S. \u00a7 55A-3-04 required Defendants to enjoin Plaintiff\u2019s action through a compulsory counterclaim, which Defendants did not do.\nWe agree with Defendants\u2019 contentions. Defendants did argue at trial that Plaintiff lacked the power to impose the assessment at issue, but they also argued that the restrictive covenants under which Plaintiff imposed the assessment were invalid and unenforceable. While it is possible that N.C.G.S. \u00a7 55A-3-04 foreclosed Defendants\u2019 former argument regarding the validity of Plaintiff\u2019s corporate actions, it did not prohibit Defendants from challenging the underlying validity of the restrictive covenants as a matter of contract law.\nIt is true that homeowners in previous cases have challenged assessments by bringing injunctive actions and arguing that such assessments were ultra vires. See, e.g., Parker v. Figure \u201c8\u201d Beach Homeowners\u2019 Ass\u2019n, 170 N.C. App. 145, 146, 611 S.E.2d 874, 874 (2005). However, this Court has also previously allowed parties to assert a defensive challenge to the validity of assessment-related restrictive covenants without bringing a separate ultra vires action. In Beech Mountain Property Owner\u2019s Assoc. v. Seifart, 48 N.C. App. 286, 269 S.E.2d 178 (1980), for example, the plaintiff homeowners\u2019 association sued to recover unpaid assessments owed by the defendant property owners. Id. at 287, 269 S.E.2d at 179. The defendants did not attempt to enjoin the plaintiff from imposing the assessments, but rather filed a motion for summary judgment arguing that the covenants upon which the plaintiff relied in assessing the defendants were unenforceable. Id. at 294, 269 S.E.2d at 182. The trial court granted the defendants\u2019 motion, and our Court affirmed the trial court\u2019s decision. Id. at 297, 269 S.E.2d at 184. See also, e.g., Figure Eight Beach Homeowners\u2019 Association v. Parker, 62 N.C. App. 367, 367, 303 S.E.2d 336, 337, disc. review denied, 309 N.C. 320, 307 S.E.2d 170 (1983) (where the plaintiff homeowners\u2019 association sued for unpaid assessments, the defendant homeowners filed a motion for summary judgment contesting the validity of the assessment covenants); Snug Harbor Property Owners Assoc. v. Curran, 55 N.C. App. 199, 200, 284 S.E.2d 752, 753 (1981), disc. review denied, 305 N.C. 302, 291 S.E.2d 151 (1982) (where the plaintiff homeowners\u2019 association sued for unpaid assessments, the defendant homeowners filed a motion to dismiss under N.C. Gen. Stat. \u00a7 1A-1, Rule 12(b)(6) on the grounds that the assessment covenants were invalid).\nWe therefore hold that the trial court erred by concluding, as one basis supporting judgment in Plaintiff\u2019s favor, that Defendants had not challenged by appropriate pleading Plaintiff\u2019s power to impose the disputed assessment.\nB.\nDefendants next argue that the trial court erred by concluding as an alternative basis for judgment in Plaintiff\u2019s favor that the restrictive covenants contained in the Declaration are \u201cnot vague as to the right of [Plaintiff] to assess attorney fees, against its members, which are incurred by [Plaintiff] in defending itself and its members against claims brought against [Plaintiff].\u201d We review the trial court\u2019s legal conclusions de novo. Mills, 185 N.C. App. at 156, 647 S.E.2d at 674.\nOur Court has previously stated that covenants imposing affirmative obligations on a grantee must contain \u201csome ascertainable standard ... by which the court can objectively determine both that the amount of the assessment and the purpose for which it is levied fall within the contemplation of the covenant.\u201d Seifart, 48 N.C. App. at 295, 269 S.E.2d at 183. For example, \u201ca covenant which purports to bind the grantee of land to pay future assessments in whatever amount to be used for whatever purpose the assessing entity might from time to time deem desirable would fail to provide the court with a sufficient standard.\u201d Id. Defendants argue that the covenant allowing Plaintiff to levy assessments \u201cto promote the . . . welfare of residents\u201d allows Plaintiff to levy assessments for any amount and for any purpose, and is therefore vague and unenforceable.\nIn support of their argument, Defendants point to a series of cases in which our Court has held that a covenant was too vague to support a maintenance assessment imposed by a homeowners\u2019 association. In Allen v. Sea Gate Ass\u2019n, 119 N.C. App. 761, 460 S.E.2d 197 (1995), for example, our Court examined a restrictive covenant requiring homeowners to pay a sixty-dollar annual assessment \u201cfor the maintenance, upkeep and operations of the various areas and facilities by [the homeowners\u2019 association.]\u201d Id. at 764, 460 S.E.2d at 199-200. Our Court applied a three-part test to determine the validity of the covenant:\nAssessment provisions in restrictive covenants (1) must contain a \u201c \u2018sufficient standard by which to measure . . . liability for assessments,\u2019 \u201d... (2) \u201cmust identify with particularity the property to be maintained,\u201d and (3) \u201cmust provide guidance to a reviewing court as to which facilities and properties the .association . . . chooses to maintain.\nId. at 764, 460 S.E.2d at 199 (quoting Figure Eight, 62 N.C. App. at 376, 303 S.E.2d at 341 (citation omitted)). Because the covenant did not name any particular properties to be maintained and did not contain a standard by which our Court could assess how the homeowners\u2019 association chose which properties to maintain, our Court held that the assessment covenant was unenforceable. Id. at 764-65, 460 S.E.2d at 200. See also Snug Harbor, 55 N.C. App. at 203-04, 284 S.E.2d at 755 (holding invalid a covenant providing that assessments would be used for \u201c[m]aintenance and improvement of [the neighborhood] and its appearance, sanitation, easements, recreation areas and parks\u201d); Seifart, 48 N.C. App. at 288, 295-97, 269 S.E.2d at 179, 183-84 (holding invalid covenants establishing, inter alia, \u201creasonable annual assessment charges for road maintenance and maintenance of the trails and recreational areas\u201d).\nDefendants argue that the covenant in the present case fails the three-part test set out in Allen because it does not specifically enumerate the various types of expenditures for which Plaintiff may levy assessments to promote the welfare of its members. While we agree that the test used in Allen, Snug Harbor, and Seifart required a clear level of specificity, we note that each of those cases involved covenants allowing assessments for maintenance of physical property. Indeed, the test itself references the \u201cproperty\u201d and \u201cfacilities\u201d to be maintained. If Plaintiff in the present case had levied an assessment for property maintenance pursuant to the \u201cwelfare\u201d covenant, we would apply the Allen test to determine the validity of the covenant with respect to that assessment. However, Plaintiff here levied an assessment for a non-maintenance expenditure. By its own terms, the Allen test is inapplicable to the facts of the present case. Rather, we evaluate the covenant at issue according to the general standard that covenants imposing affirmative obligations on the grantee must contain \u201csome ascertainable standard ... by which the court can objectively determine both that the amount of the assessment and the purpose for which it is levied fall within the contemplation of the covenant.\u201d Seifart, 48 N.C. App. at 295, 269 S.E.2d at 183.\nWe first determine whether the purpose of the assessment falls within the contemplation of the covenant. The covenant allows Plaintiff to levy assessments \u201cto promote the ... welfare of residents\u201d in the Willow Bend Subdivision. We acknowledge that a covenant allowing assessments for the \u201cwelfare\u201d of neighborhood residents may be vague and unenforceable with respect to many types of assessments. In the current case, however, we determine only whether the covenant contemplates an assessment levied to cover legal costs incurred by Plaintiff in defending itself and its members in a lawsuit or administrative proceeding.\nIn North Carolina, a nonprofit corporation generally must be represented by a licensed attorney and cannot represent itself in a legal proceeding. See Lexis-Nexis v. Travishan Corp., 155 N.C. App. 205, 207-09, 573 S.E.2d 547, 549 (2002). If a homeowners\u2019 association were unable to employ an attorney to defend against outside claims, the association and its members could face significant monetary liability. Defendants admitted at the summary judgment hearing before Judge Tucker that Plaintiff could levy an assessment against its members to pay a court judgment. Such an assessment would clearly serve the \u201cwelfare\u201d of the association members. Cf. Ocean Trail Unit Owners Ass\u2019n v. Mead, 650 So. 2d 4, 7 (Fla. 1994) (noting that \u201c[i]f assessments cannot be enforced to pay judgments which have been entered against [a condominium] association and which can be executed against the association property, the condominium could be destroyed, to the detriment of all the owners\u201d). If the covenant at issue contemplates assessments for the payment of court judgments, it surely contemplates assessments for the employment of legal counsel to defend against such judgments in the first instance.\nFurther, we note that an assessment for legal fees pursuant to the \u201cwelfare\u201d covenant was clearly foreseeable by the parties at the time that Defendants purchased their lot in the Willow Bend Subdivision. Under the North Carolina Nonprofit Corporation Act, which was enacted prior to 2003, Plaintiff has the power \u201cto do all things necessary or convenient to carry out its affairs,\u201d including the power \u201c[t]o sue and be sued, [and] complain and defend in its coiporate name[.]\u201d N.C. Gen. Stat. \u00a7 55A-3-02(a)(1) (2007). We must presume that Defendants, at the time they purchased their lot, were aware of Plaintiffs ability to defend itself. See Wise v. Harrington Grove Cmty. Ass\u2019n, 357 N.C. 396, 406, 584 S.E.2d 731, 739, reh\u2019g denied, 357 N.C. 582, 588 S.E.2d 891 (2003) (noting that \u201c[a] real estate covenant is a contract, and parties are generally presumed to take into account all existing laws when entering into a contract\u201d). We also must presume that Defendants were aware that Plaintiff would be required to employ and pay legal counsel in the event it needed to defend itself. See Lexis-Nexis, 155 N.C. App. at 207-09, 573 S.E.2d at 549. Therefore, Defendants could have foreseen that if Plaintiff ever incurred legal fees in its own defense, it would levy a reasonable assessment to pay these fees \u201cto promote the welfare . . . of the residents\u201d of the Willow Bend Subdivision.\nWe next determine whether there is an ascertainable standard by which our Court can objectively determine that the amount of the assessment fell within the contemplation of the covenant. We find that such a standard does exist. Specifically, we find that when Plaintiff employed an \u00e1ttorney to defend itself, the amount of the assessment contemplated by the covenant at issue was the cost incurred by Plaintiff in securing legal representation. Further, Defendants do not argue that the amount of the assessment was greater than the expense Plaintiff incurred in securing legal representation, nor do Defendants argue that they were assessed more than their pro rata share of Plaintiffs legal costs.\nBased on the above, we hold that the covenant at issue contains an \u201cascertainable standard ... by which [our] [C]ourt can objectively determine both that the amount of the assessment and the purpose for which it is levied fall within the contemplation of the covenant.\u201d Seifart, 48 N.C. App. at 295, 269 S.E.2d at 183. We further hold that both the purpose and amount of the assessment do in fact fall within the contemplation of the covenant. Therefore, the \u201cwelfare\u201d covenant is not vague with respect to the specific assessment at issue, and is enforceable against Defendants.\nDefendants contend that this holding would give homeowners\u2019 associations \u201cunlimited discretion to rely upon vague covenants to assess property owners any amount [they] choose[] and for whatever reason [they] desiref].\u201d Defendants\u2019 concerns are unfounded. We do not hold that covenants allowing homeowners\u2019 associations to levy non-maintenance assessments for the \u201cwelfare\u201d of their members are sufficiently definite to support any and all assessments, no matter their purpose or amount. We hold only that in this case, the covenant at issue is not vague as to Plaintiff\u2019s ability to levy an assessment for the costs of defending itself and its members against claims brought against Plaintiff. The trial court did not err in reaching the same limited conclusion as an alternative basis for judgment in Plaintiff\u2019s favor. Defendants\u2019 assignment of error is overruled.\nC.\nFinally, Defendants argue that the trial court erred in entering judgment for Plaintiff even though Plaintiff was not entitled to recover attorney\u2019s fees absent statutory authority permitting such recovery. Defendants note that \u201c[a]s a general rule, in the absence of some contractual obligation or statutory authority, attorney fees may not be recovered by the successful litigant as damages or a part of the court costs.\u201d Washington v. Horton, 132 N.C. App. 347, 349, 513 S.E.2d 331, 333 (1999). According to Defendants, Plaintiff is seeking to recover attorney\u2019s fees it incurred in defending against Defendants\u2019 prior discrimination claims, but has cited no contractual obligation or statutory authority permitting such recovery. Therefore, Defendants contend, Plaintiff is unable to recover on its claim.\nDefendants\u2019 argument is without merit. Plaintiff is not seeking to recover the attorney\u2019s fees it previously incurred in defending against Defendants\u2019 prior discrimination claims. Rather, Plaintiff is seeking to recover a valid assessment that it levied against Defendants. The fact that this assessment will be used to pay attorney\u2019s fees incurred in prior administrative proceedings does not preclude Plaintiff\u2019s claim under the rule cited in Washington. Defendants\u2019 assignment of error is overruled.\nII. Plaintiffs Appeal\nPlaintiff raises two issues in its appeal. We consider each of Plaintiff\u2019s arguments in turn.\nA.\nPlaintiff first argues that the trial court erred by denying Plaintiff\u2019s motion for attorney\u2019s fees under N.C. Gen. Stat. \u00a7 6-21.5. This statute provides:\nIn any civil action . . . the court, upon motion of the prevailing party, may award a reasonable attorney\u2019s fee to the prevailing party if the court finds that there was a complete absence of a justiciable issue of either law or fact raised by the losing party in any pleading. ... A party who advances a claim or defense supported by a good faith argument for an extension, modification, or reversal of law may not be required under this section to pay attorney\u2019s fees.\nN.C. Gen. Stat. \u00a7 6-21.5 (2007). Where attorney\u2019s fees are available under N.C.G.S. \u00a7 6-21.5, we review the trial court\u2019s denial of attorney\u2019s fees for abuse of discretion. Cf. Phillips v. Warren, 152 N.C. App. 619, 629, 568 S.E.2d 230, 236-37 (2002), disc. review denied, 356 N.C. 676, 577 S.E.2d 633 (2003) (setting the standard of review for a trial court\u2019s decision to award attorney\u2019s fees under N.C. Gen. Stat. \u00a7 6-21.1).\nPlaintiff argues that attorney\u2019s fees were available and appropriat\u00e9 under N.C.G.S. \u00a7 6-21.5 because Defendants did not raise any justiciable issue of law or fact in this case. We disagree. As discussed above, Defendants raised an appropriate challenge to the validity of the restrictive covenant at issue. Further, we find that Defendants made a good-faith argument regarding the invalidity of the restrictive covenants, even though Defendants\u2019 argument was not meritorious. Because Defendants presented a justiciable issue in this case, Plaintiff was unable to recover attorney\u2019s fees pursuant to N.C.G.S. \u00a7 6-21.5. The trial court therefore did not abuse its discretion by declining to award Plaintiff attorney\u2019s fees under N.C.G.S. \u00a7 6-21.5. Plaintiff\u2019s assignment of error is overruled.\nB.\nPlaintiff next argues that the trial court erred by denying Plaintiff\u2019s motion for attorney\u2019s fees under N.C. Gen. Stat. \u00a7 47F-3-116(e). This statute, which is part of the North Carolina Planned Community Act (PCA), is titled \u201cLien for assessments\u201d and provides in part:\n(a) Any assessment levied against a lot remaining unpaid for a period of 30 days or longer shall constitute a lien on that lot... . [T]he [homeowners\u2019] association may foreclose the claim of lien in like manner as a mortgage on real estate under power of sale[.]\n(d) This section does not prohibit other actions to recover the sums for which subsection (a) of this section creates a lien[.]\n(e) A judgment, decree, or order in any action brought under this section shall include costs and reasonable attorneys\u2019 fees for the prevailing party.\nN.C. Gen. Stat. \u00a7 47F-3-116(e) (2007). We review a trial court\u2019s decision whether to award mandatory attorney\u2019s fees de novo. Cf. Turner v. Duke University, 325 N.C. 152, 165, 381 S.E.2d 706, 714 (1989) (stating that a \u201ctrial court\u2019s decision to impose or not to impose mandatory sanctions under N.C.G.S. \u00a7 1A-1, Rule 11(a) is reviewable de novo as a legal issue\u201d).\nWe first note that the PCA generally applies only to planned communities created after 1 January 1999. See N.C. Gen. Stat. \u00a7 47F-l-102(a) (2007). However, certain portions of the PCA are retroactive and apply to pre-1999 planned communities unless a planned community\u2019s declaration or articles of incorporation expressly state otherwise. See N.C. Gen. Stat. \u00a7 47F-l-102(c) (2007). N.C.G.S. \u00a7 47F-3-116 is among the provisions made retroactive by N.C.G.S. \u00a7 47F-l-102(c), and the Declaration of the Willow Bend Subdivision does not provide otherwise. Therefore, N.C.G.S. \u00a7 47F-3-116 applies to the Willow Bend Subdivision.\nPlaintiff argues that because it was the prevailing party in an action to recover an assessment, N.C.G.S. \u00a7 47F-3-116(e) required the trial court to award Plaintiff reasonable attorney\u2019s fees. We disagree. N.C.G.S. \u00a7 47F-3-116(e) only mandates an award of attorney\u2019s fees where the requesting party prevailed in an action \u201cbrought under this section.\u201d The type of action created by N.C.G.S. \u00a7 47F-3-116 is not one in which a homeowners\u2019 association sues on the underlying debt created by a homeowner\u2019s failure to pay an assessment. Rather, the action created by N.C.G.S. \u00a7 47F-3-116 is one in which a homeowners\u2019 association forecloses on a lien created under N.C.G.S. \u00a7 47F-3-116(a) for unpaid assessments. Plaintiff here has not sought to foreclose on a lien; rather, Plaintiff has sued on the underlying, debt owed by Defendants. While N.C.G.S. \u00a7 47F-3-116(d) contemplates that a homeowners\u2019 association may bring such an action, it is not the type of action that allows the homeowners\u2019 association to collect mandatory attorney\u2019s fees under N.C.G.S. \u00a7 47F-3-116(e). We therefore hold that the trial court did not err by denying Plaintiff\u2019s request for attorney\u2019s fees under N.C.G.S. \u00a7 47F-3-116(e). Plaintiff\u2019s assignment of error is overruled.\nIn Defendants\u2019 appeal we affirm.\nIn Plaintiff\u2019s appeal we affirm.\nJudges TYSON and STEPHENS concur.\n. In a 16 June 2006 letter from Plaintiff\u2019s counsel to Defendants, Plaintiff\u2019s counsel states that the NCHRC \u201cdismissed [Defendants\u2019] charges with a determination that no reasonable grounds existed to believe [Plaintiff] or its officers had committed an unlawful discriminatory housing practice against [Defendants].\u201d In subsequent filings with the trial court, however, Defendants state that the NCHRC in fact issued a right-to-sue letter to Defendants in response to Defendants\u2019 complaint.\n. Defendants also assign error to Judge Tucker\u2019s 24 April 2007 order denying Defendants\u2019 motion for summary judgment as to the validity of the restrictive covenants. Our Court will not review a denial of summary judgment where the trial court has issued a final judgment on the merits. WRI/Raleigh, L.P. v. Shaikh, 183 N.C. App. 249, 252, 644 S.E.2d 245, 246-47 (2007).", "type": "majority", "author": "McGEE, Judge." } ], "attorneys": [ "Ronald E. Winfrey for Plaintiff", "Newman & Newman, PLLC, by James T. Newman, Jr. and Ryann W. Angle, for Defendants." ], "corrections": "", "head_matter": "WILLOW BEND HOMEOWNERS ASSOCIATION, INC., Plaintiff v. THURSTON ROBINSON and CHARLOTTE ROBINSON, Defendants\nNo. COA07-1290\n(Filed 2 September 2008)\n1. Associations\u2014 homeowners association \u2014 power to impose assessment \u2014 restrictive covenants \u2014 propriety of challenge \u2014 ultra vires action\nThe trial court erred by concluding as a matter of law that defendant lot owners did not challenge, by appropriate pleading, plaintiff homeowners association\u2019s power to impose the disputed assessment because: (1) while it is possible that N.C.G.S. \u00a7 55A-3-04 foreclosed defendants\u2019 argument regarding the validity of plaintiff\u2019s corporate actions, it did not prohibit defendants from challenging the underlying validity of the restrictive covenants as a matter of contract law; and (2) although homeowners in previous cases have challenged assessments by bringing injunctive actions and arguing that such assessments were ultra vires, the Court of Appeals has also previously allowed parties to assert a defensive challenge to the validity of assessment-related restrictive covenants without bringing a separate ultra vires action.\n2. Associations\u2014 homeowners association \u2014 power to impose assessment \u2014 welfare covenant \u2014 assessment of attorney fees \u2014 nonmaintenance expenditure\nThe trial court did not err by concluding as an alternative basis for judgment in plaintiff homeowners association\u2019s favor that a restrictive covenant allowing plaintiff to levy assessments \u201cto promote the . . . welfare of residents\u201d was not vague as to the right of plaintiff to assess attorney fees against its members which are incurred by plaintiff in defending itself and its members against claims brought against plaintiff because: (1) although defendants contend the covenant failed the three-part test set out in Allen, 119 N.C. App. 761 (1995), that test was inapplicable since plaintiff levied an assessment for a nonmaintenance expenditure instead of for property maintenance; (2) the general standard is that covenants imposing affirmative obligations on the grantee must contain some ascertainable standard by which the court can objectively determine both that the amount of the assessment and the purpose for which it is levied fall within the contemplation of the covenant; (3) the parties agreed that the covenant contemplated assessments for payment of court judgments, and thus, it follows that it surely contemplated assessments for the employment of legal counsel to defend such judgments; (4) an assessment for legal fees under the \u201cwelfare\u201d covenant was foreseeable by the parties at the time that defendants purchased their lot in the subdivision; and (5) the covenant contained an ascertainable standard since defendants did not argue that the amount of the assessment was greater than the expense plaintiff incurred in securing legal representation, nor that they were assessed more than their pro rata share of plaintiffs legal costs.\n3. Associations\u2014 homeowners association \u2014 attorney fees\u2014 recovery of assessment\nThe trial court did not err by entering judgment for plaintiff homeowners association to recover an assessment for attorney fees even though defendants contend plaintiff was not entitled to recover attorney fees absent statutory authority because: (1) contrary to defendants\u2019 assertion, plaintiff was not seeking to recover attorney fees it previously incurred in defending against defendants\u2019 prior discrimination claims, but instead was seeking to recover a valid assessment that it levied against defendants; and (2) the fact that this assessment will be used to pay attorney fees incurred in prior administrative proceedings does not preclude plaintiff\u2019s claim under the rule cited in Washington, 132 N.C. App. 347 (1999).\n4. Associations; Costs\u2014 denial of attorney fees \u2014 good faith argument\nThe trial court did not abuse its discretion by denying plaintiff homeowners association\u2019s motion for attorney fees under N.C.G.S. \u00a7 6-21.5 because: (1) defendants raised an appropriate challenge to the validity of the pertinent restrictive covenant; and (2) defendants made a good faith argument regarding the invalidity of the restrictive covenant even though the argument was not meritorious.\n5. Associations; Costs\u2014 mandatory attorney fees \u2014 lien for assessments\nThe trial court did not err by denying plaintiff homeowners association\u2019s motion for attorney fees under the liens for assessments section of the North Carolina Planned Community Act (PCA) in N.C.G.S. \u00a7 47F-3-116(e) because: (1) N.C.G.S. \u00a7 47F-3-116(e) only mandates an award of attorney fees where the requesting party prevailed in an action brought under this section; (2) the type of action created by this statute is not one in which a homeowners association sues on the underlying debt created by a homeowner\u2019s failure to pay an assessment, but instead the action created is one in which a homeowners association forecloses on a lien created under N.C.G.S. \u00a7 47F-3-116(a) for unpaid assessments; (3) in the instant case plaintiff has not sought to foreclose on a lien, but instead sued on the underlying debt owed by defendants; and (4) while the statute contemplates that a homeowners association may bring such an action, it is not the type of action that allows the collection of mandatory attorney fees.\nAppeal by Defendants from order entered 24 April 2007 by Judge Kimbrell Kelly Tucker in District Court, Cumberland County, and appeal by Plaintiff and Defendants from order entered 25 May 2007 by Judge John W. Dickson in District Court, Cumberland County. Heard in the Court of Appeals 19 March 2008.\nRonald E. Winfrey for Plaintiff\nNewman & Newman, PLLC, by James T. Newman, Jr. and Ryann W. Angle, for Defendants." }, "file_name": "0405-01", "first_page_order": 433, "last_page_order": 447 }