Opinion
2012-07-24
Alan R. RYBARCHYK, Terri Skladany, Francis Piraino, Barbara Piraino, Rudolph Macharik, Joyce Bittrolff, Malcolm Worob, Joyce Ross, Arthur Brombacher, Cynthia Brombacher, Edward Lanigan, Norman Wick, Dennis Nemeth, Ida Nemeth, Harry Hagen, Dianne Hagen, Geneieve Argen, Laurie Wagner, Raymond Barr, Richard Lake, Joan Lake, Marie Edelman, Patricia O'Neil, Delores Wirtz, Florence Ryan, Richard Carnicom, Reiko Carnicom, Harry Hartshorn, Crystal Van Why, Idriz Mujovic, Kujtim Mujovic, Mary Mahon, Erik Regan, Lynda Regan, David Jacobs, Barbara Jacobs, Frank McDonald, Patricia McDonald, Margaret Mosloskie and Christopher Cortier v. POCONO SUMMIT LAKE PROPERTY OWNERS ASSOCIATION, INC., Appellant.
Gregory D. Malaska, Stroudsburg, for appellant. James V. Fareri, Stroudsburg, for appellees.
Gregory D. Malaska, Stroudsburg, for appellant. James V. Fareri, Stroudsburg, for appellees.
BEFORE: McGINLEY, Judge, and LEAVITT, Judge and COVEY, Judge.
OPINION BY Judge COVEY.
Appellant, Pocono Summit Lake Property Owners Association, Inc. (Association), seeks review of the Court of Common Pleas of Monroe County's (trial court) December 5, 2011 order granting declaratory judgment in favor of Alan R. Rybarchyk, Terri Skladany, Francis Piraino, Barbara Piraino, Rudolph Macharik, Joyce Bittrolff, Malcolm Worob, Joyce Ross, Arthur Brombacher, Cynthia Brombacher, Edward Lanigan, Norman Wick, Dennis Nemeth, Ida Nemeth, Harry Hagen, Dianne Hagen, Geneieve Argen, Laurie Wagner, Raymond Barr, Richard Lake, Joan Lake, Marie Edelman, Patricia O'Neil, Delores Wirtz, Florence Ryan, Richard Carnicom, Reiko Carnicom, Harry Hartshorn, Crystal Van Why, Idriz Mujovic, Kujtim Mujovic, Mary Mahon, Erik Regan, Lynda Regan, David Jacobs, Barbara Jacobs, Frank McDonald, Patricia McDonald, Margaret Mosloskie and Christopher Cortier (Appellees), prohibiting the Association from assessing and collecting any mandatory dues, fees, fines or assessments against property “unit” owners. The issues before this Court are whether the trial court erred when it concluded that: 1) Pocono Summit Lakes is not a “planned community” as defined in the Uniform Planned Community Act (Act); 2) the Association-owned parcels were not “common facilities” as defined in the Act; 3) Appellees were not obligated to pay maintenance assessments on the properties owned by the Association; and 4) testimony regarding prior incidents of exclusion from the Association-owned parcels was properly considered. We affirm.
Act of December 19, 1996, P.L. 1336, No. 180, § 1 (68 Pa.C.S. §§ 5101–5414).
Pocono Summit Lakes, Inc. (Corporation) created Pocono Summit Lakes Subdivision (Subdivision) under three subdivision plans: Plotting I, Pocono Summit Lakes, Inc., 1 June 1955; Plotting II, Pocono Summit Lakes, Inc., 31 May 1956; and, Plotting III, Pocono Summit Lakes, Inc., 25 June 1957. All deeds conveyed by the Corporation contained uniform covenants and included a provision stating:
The party of the first part gives and grants to the parties of the second part, their heirs and assigns, the right and privilege of boating, bathing, fishing and ice skating in the lake of the party of the first part, known as Pocono Summit Lake No. 2, provided, however, that no boats, canoes or ice boats shall be operated upon said lake by mechanical means; nor shall any of the foregoing activities be engaged in for any commercial purpose whatsoever.
Reproduced Record (R.R.) at 79a.
The Association was formed on October 26, 1959 by a group of property owners as a Pennsylvania nonprofit corporation. At that time, the Association sought voluntary membership from the Subdivision's lot owners. In the late 1950s, the Corporation granted a group of property owners permission to construct a clubhouse which was financed from voluntary donations.
In 1960, Coolbaugh Township accepted dedication of the private Subdivision roads. As a result, all Subdivision roads are now township roads, are maintained by the township and are accessible to the public. In 1962, the Corporation conveyed to the Association three parcels of undeveloped land which lead to or abut Pocono Summit Lake No. 2, and some additional residential lots to the Association. That same year, the Corporation also conveyed the Pocono Summit Lake No. 2 (Lake) to Sundance Valley Lake Corporation (Sundance) which, on August 28, 1979, conveyed the Lake to the Association.
At the time of the aforementioned conveyances, Association membership was voluntary, and no mandatory dues were imposed upon homeowners. However, in 1988 the Association commenced nine Magisterial District Court actions against property owners to collect unpaid assessments levied against property owners. Ultimately, after an appeal to the Monroe County Court of Common Pleas, and a Board of Arbitrator's decision in favor of the property owners, the Association voluntarily discontinued the matter.
In January 2009, the Association notified all property owners that it was imposing mandatory assessments of $100.00 per homeowner, $50.00 per lot owner, and late charges of $10.00. On June 25, 2009, Appellees filed a Complaint in the trial court seeking a declaratory judgment prohibiting the Association from assessing mandatory dues, fees, assessments or fines to non-member property owners. The parties stipulated to many of the facts, but at a hearing on May 26, 2011, testimony was offered regarding disputed allegations that the Association prohibited non-member property owners from using the Lake, clubhouse and beach areas. Before the trial court, the Association argued that the Subdivision is a “planned community” under the Act, that the Lake, beach and clubhouse areas are “common facilities” as defined by the Act, and as a result, the Association is authorized to collect assessments for common expenses from unit owners. The Appellees argued that the Subdivision is not a “planned community” under the Act. In support, they noted that nothing in the deeds indicated or even suggested that the developer would convey any common areas to an association. In fact, Appellees pointed out, that no “common areas” existed in the Subdivision prior to the creation of the Association in 1959. Further, Appellees argued that the Association is distinguishable from those associations authorized to collect assessments, in that it “was created and functioned as a private club for decades before unilaterally determining that it was entitled to collect dues from non-member lot owners for amenity areas that it determined to acquire from the developer unilaterally.” R.R. at 12.
On December 5, 2011, the trial court granted declaratory judgment, concluding:
We find that based upon the specific facts of this case, the Association may not seek to assess dues and costs associated with the upkeep and maintenance of the beach and pavilion areas. These are owned by the Association, which is a private association formed by members who have exclusive rights and benefits of their use. They are not common areas under the definition of the [Act], and as such the Association is not lawfully empowered to collect assessments from non-member [Subdivision] property owners.
Trial Ct. Op. at 9–10. The Association appealed to this Court.
“Our scope of review of declaratory judgment actions and actions in mandamus is limited to determining whether the trial court committed an error of law or abused its discretion, and whether substantial evidence exists to support its findings.” Twp. of Forks v. Forks Twp. Mun. Sewer Auth., 759 A.2d 47, 51 n. 2 (Pa.Cmwlth.2000). “When reviewing an issue of law in a declaratory judgment action, an appellate court's standard of review is de novo and the scope of review is plenary.” Wells Fargo Bank v. Dauphin Cnty., 19 A.3d 14, 19 n. 2 (Pa.Cmwlth.2011).
The Association first argues that the trial court erred when it concluded that the Subdivision is not a “planned community” as defined in the Act. We disagree.
“Pursuant to the Act, certain of its provisions apply to homeowner associations founded before the enactment of the Act; other provisions of the Act do not apply to homeowner associations unless adopted as part of an association's by-laws. Section 5102(b)-(b.1) of the Act, 68 Pa.C.S. § 5102(b)-(b.1).” Barcia v. Fenlon, 37 A.3d 1, 3 (Pa.Cmwlth.2012). In the instant matter, both the Subdivision and the Association were created long before the Act's passage. In accordance with Section 5102(b) of the Act, Section 5103 of the Act, 68 Pa.C.S. § 5103, applies retroactively to planned communities created before the effective date of the Act, to the extent necessary to construe the other applicable retroactive provisions. See Stillwater Lakes Civic Assn. v. Krawitz, 772 A.2d 118 (Pa.Cmwlth.2001). The Act defines a “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. In reviewing the above definition, the Pennsylvania Supreme Court explained:
In simpler terms, a planned community is an area of land consisting of homes that are individually owned as well as common areas that are owned or leased by an association consisting of all of the homeowners in the community. See id. §§ 5103, 5205, 5301; Uniform Planned Community Act, prefatory note, 7B U.L.A. (1980); [Norman Geis, Codifying the Law of Homeowner Associations: The Uniform Planned Community Act, 15 Real Prop., Prob. and Tr. J. at 854, 856 (1980) ]. Significantly, however, the planned community homeowners are responsible for paying dues or fees to the homeowners' association for the common facilities. See68 Pa.C.S. § 5103 (defining ‘common expense liability’ as the ‘liability for common expenses allocated to each [home]’); id. § 5208 (explaining how the common expenses of the homeowners' association are allocated among the homeowners in a planned community).
Saw Creek Cmty. Ass'n, Inc. v. Cnty. of Pike, 581 Pa. 436, 442, 866 A.2d 260, 263 (2005) (footnote omitted). We conclude that the Subdivision is not a “planned community” as defined in the Act for several reasons.
Although Saw Creek did not involve retroactive application of the Act, it provides a further explanation of a “planned community”.
First, the deed conveyed to property owners grants property owners “the right and privilege of boating, bathing, fishing and ice skating in the [L]ake.” R.R. at 79 a. There is simply nothing in the deed that obligates an owner 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 (emphasis added).
Second, the Subdivision does not contain “common areas that are owned or leased by an association consisting of all of the homeowners in the community.” Saw Creek, 581 Pa. at 442, 866 A.2d at 263 (emphasis added). As the trial court found, the Association does not consist of all homeowners, and in fact, was created as a private club with a voluntary membership that required the applicant to be a reputable, law abiding, community minded person and mandated that membership be at the sole discretion of the Board of Directors. Further, the trial court found that the non-member property owners had been denied access to the purported “common areas.” Thus, the record evidence is clear that the Association was not intended to, nor did it consist of all homeowners in the community.
Third, the Lake, the specific piece of property that is the subject of the deed provision, was sold by the Corporation to a private company in 1962 despite the fact that the Association was already in existence, and the Lake was not acquired by the Association until 1979. Thus, the Lake did not even become Association property until approximately twenty years after the creation of the Association. The other Association property was not sold to the Association until 1962, several years after the Subdivision was created, and three years after the Association came into existence. Accordingly, at the time the Subdivision was created and the properties were initially sold by the Corporation, the Subdivision was not intended to be a planned community, with common areas managed by an association.
Finally, Section 5301 of the Act defines unit owners' association as follows:
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....
68 Pa.C.S. § 5301 (emphasis added). Based upon the undisputed fact that the Association was created by a group of property owners, it is clear that the Association was not organized prior to “the date the first unit in the planned community [was] conveyed to a person other than a successor declarant.” Id. Further, it is undisputed that the Association has not at all times consisted exclusively of all the unit owners. Id. Moreover, the Association's by-laws provide for “honorary members” who are not required to be unit owners. Thus, membership in the Association does not consist “exclusively of all of the unit owners....” Id. (emphasis added). Accordingly, the Association is not an “association” as defined by the Act.
.Section 5103 of the Act defines “association” as “the unit owners association organized under Section 5301 [of the Act] (relating to organization of unit owners' association).” Although Section 5301 of the Act is not identified in Section 5102(b) of the Act as being retroactive, because it is specifically referenced and relied upon in Section 5103 of the Act which is explicitly deemed to be retroactive, we conclude that Section 5301 of the Act may be relied upon for purposes of defining the term “association.”
For all of the aforementioned reasons, the trial court properly concluded that the Subdivision is not a “planned community” as defined in the Act.
Because we have concluded that the Subdivision is not a “planned community” as defined in the Act and that the Association is not an “association” as defined in the Act, Appellant's second issue, whether the trial court erred when it concluded that the Association-owned parcels were not “common facilities” as defined in the Act, is deemed moot. Notably, “common facilities” are defined in the Act as “[a]ny real estate within a planned community which is owned by the association or leased to the association....” 68 Pa.C.S. § 5103 (emphasis added).
Next we consider whether the Association may require the property unit owners to pay maintenance assessments as easement holders under common law, and whether the trial court erred when it concluded that Appellees were not obligated to pay maintenance assessments on the properties owned by the Association. We agree with the trial court that based upon the specific facts of this case, the Association may not assess fees and costs to those property owners who do not wish to become Association members.
The Association asserts that the purported “common areas” may be used by all property owners, whether they are Association members or not. The Association further argues that the previous expulsions of property owners from those areas were not authorized by the Association.
The trial court rejected the Association's argument that Appellees were required to pay for the maintenance of the “common areas” by virtue of their easements pursuant to Meadow Run and Mountain Lake Park Association v. Berkel, 409 Pa.Super. 637, 598 A.2d 1024 (1991), and Spinnler Point Colony Association, Inc. v. Nash, 689 A.2d 1026 (Pa.Cmwlth.1997). The trial court concluded that Meadow Run and Spinnler were distinguishable and not applicable to the instant matter. Importantly, the trial court found in the current case that non-members had been prevented from using the Association properties and that the beach, pavilion and boat launches “benefit only those lot owners who choose to join [the Association].” Trial Ct. Op. at 9. Therefore, it granted declaratory judgment prohibiting the Association from assessing fees to those property owners who did not wish to become members, because those property owners did not have the use and enjoyment of the Association property.
In Spinnler, the property owners had a clear right to enjoy the association property. The association was responsible for maintaining the local roads which were necessarily used by all property owners, as well as enforcing property restrictions and maintaining the lake. In the instant matter, the Association, a private club, is not responsible for maintaining the Subdivision's roads, and merely owns the Lake, beach area and clubhouse. The property owners simply hold an easement to use the Lake; a use that the non-member property owners may never choose to exercise, and, as found by the trial court, a use that has been frustrated by the Association or its representatives on more than one occasion. In Meadow Run, although the deed did not authorize an assessment, it did put property owners on notice that should an association of lot owners be formed in the future, they would be bound by any rules the association adopted concerning usage of development facilities. No such notice exists in the case at bar. Moreover, the most recent amendment to the Association's by-laws in 1987 provides in Article IV, Section 4.1, that “no such person [who own or occupy residential property] shall be obligated or required to join the association or pay its dues.” Trial Ct. Op. at 6.
The Pennsylvania Superior Court has explained:
The Pennsylvania courts have not formulated any inflexible rule of law which governs every fact situation with regard to the respective duties of the dominant and servient tenants. While we recognize the general rule, as already stated, regarding the obligation of a dominant tenant to keep in repair an easement which is used and enjoyed for the dominant estate alone, it must be recognized that this general rule is simply an application of the broader rule that the duty of repair should fall where reason, convenience, and equity require it to fall.
Borgel v. Hoffman, 219 Pa.Super. 260, 280 A.2d 608, 610 (1971) (emphasis added). Accordingly, the trial court properly concluded that Appellees were not obligated to pay maintenance assessments on the properties owned by the Association.
Finally, because we have determined that the Subdivision is not subject to the Act, and the testimony regarding prior incidents of exclusion from the Association-owned parcels is relevant to the applicability of the Act and the manner in which the fees should be assessed, we find Appellant's argument that the trial court improperly considered that testimony, to be without merit. “It is well settled that the trial court, sitting as fact finder, is free to believe all, part, or none of the evidence presented, to make all of the credibility determinations, and to resolve any conflicts in the evidence.” Boro Constr., Inc. v. Ridley Sch. Dist., 992 A.2d 208, 218 n. 16 (Pa.Cmwlth.2010).
For the above-stated reasons, the trial court's order is affirmed.
ORDER
AND NOW, this 24th day of July, 2012, the Court of Common Pleas of Monroe County's December 5, 2011 order is affirmed.