Opinion
No. 1264 C.D. 2011
08-20-2012
Kevin M. Waggle, Linda Ann Waggle and Salvatore Russo, as Trustee, Appellants v. Woodland Hills Association, Inc.
BEFORE: HONORABLE BERNARD L. McGINLEY, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE P. KEVIN BROBSON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY JUDGE LEAVITT
Kevin M. Waggle, Linda Ann Waggle and Salvatore Russo (collectively Property Owners) appeal an order of the Court of Common Pleas of Wayne County (trial court) issuing a declaratory judgment that Property Owners are members of the Woodland Hills Association, Inc. (Association) and, as such, subject to its rules and regulations. Property Owners contend that the trial court erred because their deeds do not require membership in the Association and their past actions cannot, as a matter of equity, effect a change in their deeds. Concluding that the facts critical to the doctrines of waiver and estoppel, on which the trial court based its decision, are in dispute, we reverse and remand.
The Association is a Pennsylvania not-for-profit homeowners corporation created in 1972 to maintain the common areas in a residential development known as Woodland Hills, located in Wayne County, Pennsylvania. The purposes of the corporation are to construct and maintain "the common use roads, docks and facilities and other services necessary for the owners of property or residents in the community." Reproduced Record at 85a (R.R. ___). Fees for these services are assessed upon those who live in Woodland Hills.
In 1975, Russo purchased a property in Woodland Hills and thereafter bought three additional lots. In 2002, Russo sold one of his lots to the Waggles. None of the four deeds in the Russo chain of title include a covenant making the property owner a member of the Association. The Waggles and Russo own dock slips in the lake maintained by the Association. Russo purchased his dock slip in 1977, and the Waggles purchased theirs in 2005.
In 2008, the Association filed a complaint against the Waggles, alleging that they had failed to pay fines assessed upon them for violating the Association's rules and regulations against "public profanity while making threats." R.R. 35a. The Waggles responded with the assertion that they were not members of the Association and, therefore, could not be fined under the Association's rules. The magisterial district judge agreed and dismissed the Association's complaint. In January 2009, the Association advised Property Owners that because they did not consider themselves members of the Association, they would no longer be permitted to maintain a slip at the community boat dock.
In response, Property Owners filed a declaratory judgment action to establish that they (1) were not members of the Association and (2) did not need to be members to own and use a boat slip. The Association answered the complaint that when Property Owners purchased their docks, they knew that the Association was responsible for the maintenance of the docks. Further, Property Owners had paid fees to the Association for maintenance of the docks and had voted at Association meetings on matters that concerned the use of the docks. The Association further explained that the owner of the lake, PPL, had granted the Association a license to use the lake, which had enabled the Association to construct the docks. The Association agreed that Property Owners own their own docks but asserted that their permission to use them is dependent on the Association's license. In turn, the Association only allows Association members to enjoy the privileges granted by its license with PPL.
Depositions focused on the history of the Association, its by-laws and the deeds within the development. Under the bylaws, only members of the Association are permitted to vote. Discovery showed that Property Owners attended Association meetings and voted on at least three occasions. After discovery closed, the Association filed a motion for summary judgment, and Property Owners responded with a cross-motion for summary judgment.
The trial court held that Property Owners were members of the Association because they had voted at Association meetings. Relying upon the doctrines of waiver and equitable estoppel, the trial court granted the Association's motion for summary judgment and denied Property Owners' motion for summary judgment.
On appeal, Property Owners assert that the trial court erred. They contend that the Association cannot compel property owners to become members where there is no recorded covenant in the chain of title so obligating the property owners. Likewise, the Association's by-laws cannot require property owners to become members. Finally, Property Owners assert that their votes did not make them members and the trial court erred in its application of the doctrines of equitable estoppel and waiver. They request this Court reverse the trial court's determination and hold that Property Owners are not members of the Association; are not bound by the by-laws and regulations of the Association; and may continue using their existing dock slips.
When reviewing a grant of summary judgment, this Court's scope of review is plenary, and we apply the same standards as the trial court. Weckel v. Carbondale Housing Authority, 20 A.3d 1245, 1248 n.4 (Pa. Cmwlth. 2011). Summary judgment is appropriate where the record establishes that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Id. "We review the record in the light most favorable to the nonmoving party, resolving all doubts as to the existence of a genuine issue of material fact against the moving party." Id. The trial court will be reversed if an error of law or abuse of discretion occurred. Id.
In support, Property Owners assert that the deed is the only vehicle for imposing membership in the Association. Accordingly, the Association's by-laws providing for retroactive membership are irrelevant. The Association responds that the only relevant question is whether the trial court properly applied waiver and equitable estoppel. It claims that the outcome of this case rests on whether Property Owners can challenge membership after taking advantage of rights and privileges available only to members and paying membership fees and assessments for years.
The Uniform Planned Community Act (Act), 68 Pa. C.S. §§5101-5414, applies to planned communities created after 1997. "Pursuant to the Act, certain of its provisions apply to homeowners' associations founded before the enactment of the Act; other provisions of the Act do not apply to homeowners' associations unless adopted as part of an association's by-laws. Section 5102(b)-(b.1) of the Act, [as amended,] 68 Pa. C.S. § 5102(b)-(b.1)." Barcia v. Fenlon, 37 A.3d 1, 3 (Pa. Cmwlth. 2012). While these provisions have application to planned communities created before 1997, none of them authorize an association to force property owners to become members. 68 Pa. C.S. §5102(b), (b.1).
While it appears that Property Owners initially took the position that the Association was not a legal association because no such association was mentioned in their deeds, it makes no such claim on appeal. To the contrary, it now takes the position that the Association is a uniform planned community and subject to the provisions of the Act. Because Property Owners have not raised, before this Court, the issue of the Association's authority to form, create by-laws, or assess fines and fees, we will not address it.
It states:
(b) Retroactivity.--Except as provided in subsection (c), sections 5105, 5106, 5107, 5203 (relating to construction and validity of declaration and bylaws), 5204 (relating to description of units), 5218, 5219 (relating to amendment of declaration), 5223 (relating to merger or consolidation of planned community), 5302(a)(1) through (6) and (11) through (15) (relating to power of unit owners' association), 5311 (relating to tort and contract liability), 5315 (relating to lien for assessments), 5316 (relating to association records), 5407 (relating to resales of units) and 5412 (relating to effect of violations on rights of action) and section 5103 (relating to definitions), to the extent necessary in construing any of those sections, apply to all planned communities created in this Commonwealth before the effective date of this subpart; but those sections apply only with respect to events and circumstances occurring after the effective date of this subpart and do not invalidate specific provisions contained in existing provisions of the declaration, bylaws or plats and plans of those planned communities.
(b.1) Retroactivity.--
(1) Sections 5103, 5108, 5113, 5220(i) (relating to termination of planned community), 5222 (relating to master associations), 5302(a)(8)(i), (16) and (17) (relating to power of unit owners' association), 5303(a) and (b) (relating to executive board members and officers), 5307 (relating to upkeep of planned community), 5314 (relating to assessments for common expenses) and 5319 (relating to other liens affecting planned community), to the extent necessary in construing any of those sections, apply to all planned communities created in this Commonwealth before the effective date of this subpart, but those sections apply only with respect to events and circumstances occurring after the effective date of this subsection and do not invalidate specific provisions contained in existing provisions of the declaration, bylaws or plats and plans of those planned communities.
(2) Section 5303(c) and (d), to the extent necessary in construing any of those subsections, apply to all planned communities created in this Commonwealth before the effective date of this subpart, but those subsections apply only with respect to events and circumstances occurring 180 days after the effective date of this subsection and do not invalidate specific provisions contained in existing provisions of the declaration, bylaws or plats and plans of those planned communities.
The trial court did not rely upon the Act in reaching its decision, but merely noted that the Act authorized the Association to amend its by-laws, rules, and regulations, including those relating to membership. See 68 Pa. C.S. §5302(a)(1) (granting authority to an association to adopt and amend by-laws, rules and regulations). However, it was not the Association's by-laws but, rather, the actions of Property Owners themselves that caused the trial court to conclude that they were members of the Association. The Association agrees that the Act did not authorize it to amend its by-laws, rules or regulations to make a property owner a member. Association Brief at 28. Rather, it argues that Property Owners' conduct, in paying dues, voting, and using common areas reserved for members, precludes them from disavowing their membership status.
We begin with a review of the doctrines of waiver and equitable estoppel. First, waiver has been explained as
the act of intentionally relinquishing or abandoning some known right, claim or privilege. To constitute a waiver of legal right, there must be a clear, unequivocal and decisive act of the party with knowledge of such right and an evident purpose to surrender it.Commonwealth ex rel. Pennsylvania Attorney General Corbett v. Griffin, 596 Pa. 549, 566, 946 A.2d 668, 679 (2008) (quoting Brown v. City of Pittsburgh, 409 Pa. 357, 360, 186 A.2d 399, 401 (1962)). Once a party has waived a legal right, it cannot undo that waiver and recapture that legal right. Equitable estoppel is a doctrine that allows a party to rely on another party's promise. It has been explained as follows:
Equitable estoppel is a doctrine that prevents one from doing an act differently than the manner in which another was induced by word or deed to expect. A doctrine sounding in equity, equitable estoppel recognizes that an informal promise implied by one's words, deeds or representations which leads another to rely justifiably thereon to his own injury or detriment may be enforced in equity.Prime Medica Associates v. Valley Forge Insurance Company, 970 A.2d 1149, 1157 (Pa. Super. 2009), appeal denied, 605 Pa. 688, 989 A.2d 918 (2010) (quoting Kreutzer v. Monterey County Herald Co., 560 Pa. 600, 606, 747 A.2d 358, 361 (2000)).
The Association's evidence showed that Property Owners paid assessments to the Association; voted at Association meetings; and have been permitted to own docks and enjoy common areas established for members. On this evidence, the trial court held that Property Owners have waived their legal right to claim they are not members, and the Association relied on their actions in considering Property Owners to be members. However, this is not all the relevant evidence.
In their deeds, Property Owners have been granted
the right to the use of certain areas situate along the project line of the Pennsylvania Power and Light Company and labeled "lake access area" on the aforesaid
map, and a certain map of "Woodland Hills" ... together with the right of way ... over the land lying between the above described "lake access area" and the waters of Lake Wallenpaupack and the use of Lake Wallenpaupack for lawful recreational purposes, as set forth in and subject to a certain agreement between the Pennsylvania Power and Light Company and the Grantor herein....R.R. 17a. The deeds further provide that "the use and maintenance of roads and common use facilities shall be the Grantees' and users' responsibility...." R.R. 18a (emphasis added). In short, the deeds granted Property Owners the right to use certain common areas and obligated them to participate in the cost of maintaining the roads and certain common use facilities.
The trial court did not address these deeds; it simply categorized Property Owners' payments as "dues" without analyzing whether the payment obligation derived from membership in the Association or from the deeds. Property Owners made every check payable to "Woodland Hills," without reference to the Association. Some checks noted that they were for payment of maintenance. In short, the record does not prove that Property Owners' checks were written in payment of membership dues as opposed to discharge of their obligation to maintain common property.
Further, Property Owners presented evidence that in the past the Association assessed different fees for members and non-members. Russo claimed that he paid the non-member rate and, as evidence, submitted a letter sent to him by the Association in 1985 regarding payment of his non-member rate. The letter also sets forth Russo's non-member homeowner rate for the years 1984 and 1985.
The Association acknowledges that at one time it had a separate payment for non-members, but it has provided no further information or detail. It merely asserts that it now considers all property owners to be members and, thus, there is no need for two separate fees.
Based on this evidence, we must reject the trial court's determination that Property Owners' payments to the Association may only be construed as an acknowledgement of their membership in the Association. Property Owners were obligated by their deeds to maintain the common areas, which they did by paying the Association, and it did the maintenance. It was the Association's burden to establish that these payments evidenced membership, and it did not do so.
The trial court also based its determination on the fact that Russo voted on Association matters on three occasions and that the Waggles voted once. Specifically, in 1979, Russo attended an Association meeting and voted on the issue of whether "one dock be restricted to any dues paying member of the Assoc. who has a house on their lot...." R.R. 59a, 113a-115a. In 2004, Russo submitted a proxy vote to the Association on an issue involving recreational vehicles. In 2008, Russo submitted a proxy vote on the issue of dock replacement. In 2008, the Waggles voted by proxy on the issue of dock replacement.
The Association claimed it relied on these proxies when counting the votes, and the trial court accepted this claim. Absent from the trial court's analysis is any mention of the evidence that Russo paid a non-member fee throughout the 1970s and 1980s. If Russo was permitted to vote as a non-member, this contradicts the Association's argument that voting signifies an acknowledgement of membership. There is also no explanation of how Property Owners received their proxy ballots or what information was provided to them about voting and whether it was limited to members only.
It was the Association's burden to establish that Property Owners clearly and unequivocally waived their right to remain as non-member residents of Woodland Hills. Griffin, 596 Pa. at 566, 946 A.2d at 679. The application of equitable estoppel required evidence that because Property Owners voted on Association matters, the Association justifiably relied, to its detriment, on the fact that Property Owners were members. However, no evidence was presented that Property Owners were ever informed that only members could vote on any matter, including those relating to dock slips. The trial court did not address the fact that Russo continued to receive non-member invoices even after his vote at a meeting in 1979. The voting evidence alone did not prove the Association's case.
The trial court's final reason for finding Property Owners to be members was that they received the benefit of owning docks and have been permitted to enjoy other common areas also reserved for members. The Association contends that dock ownership requires membership, but it did not present any evidence that Property Owners were ever told that membership was required. Property Owners cannot be deemed to have waived a legal right if they had no knowledge that the Association required membership as a condition of a dock slip purchase. In fact, at the time Russo purchased his dock in 1977, he claimed to have been paying the non-member rate to the Association for many years. This issue was not addressed by the trial court.
There are factual questions about what common areas are reserved exclusively for members. The Association makes much of the fact that it owns the land attached to the docks and has a license from PPL to use certain land and lake areas. However, the Property Owners' deeds grant them easements to the "lake access area" and over the land lying between the lake access area and the waters of the lake and "the use of [the Lake] for lawful recreational purposes" subject to an agreement with PPL. R.R. 17a. It cannot be assumed that every activity taking place in the lake or lake access area is reserved to Association members. Property Owners' rights under their deeds must be considered before concluding that these land use rights require Association membership.
Because the evidence presented by the Association is not sufficient to support a finding of waiver or estoppel, and because material facts are in dispute, we reverse the trial court's grant of summary judgment to the Association. The case is remanded for further proceedings.
Property Owners make a brief argument that the trial court should have granted their motion for summary judgment because they are not required to become members pursuant to their respective deeds. Summary judgment is not appropriate because material facts exist in this case, i.e., Property Owners have not conclusively established that a deed is the only route to membership. Also, it appears that the trial court did not reach the issue of a statute of limitations defense, due to the grant of the Association's motion for summary judgment. See Trial Court Opinion at 7. Therefore, outstanding issues remain in the case. --------
/s/_________
MARY HANNAH LEAVITT, Judge ORDER
AND NOW, this 20th day of August, 2012, the order of the Court of Common Pleas of Wayne County dated June 17, 2011, in the above captioned matter is hereby REVERSED as to the grant of summary judgment to Woodland Hills Association, Inc. and REMANDED for further proceedings.
Jurisdiction relinquished.
/s/_________
MARY HANNAH LEAVITT, Judge
68 Pa. C.S. §5102(b), (b.1)(1) and (2).