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BEACHCOMBER PROPERTIES, L.L.C., Plaintiff, v. STATION ONE, INC.,
MILTON M. FAULK, and wife, ANGELA P. FAULK, RICHARD F. CODY and
wife, JANET B. CODY, Defendants
Declaratory Judgments; Housing--standing--conversion of condo to time share--no existing
purchase contract or ownership
The trial court properly granted defendant-Station One's motion to dismiss for failure to
state a claim upon which relief may be granted where plaintiff had entered into a contract to
purchase a Station One condo, with the intent to convert the property to a timeshare; Station One
amended its Homeowner's Declaration to prohibit time share ownership; the contract to purchase
the contract was terminated; and plaintiff subsequently filed this complaint seeking a declaratory
judgment. At the time this complaint was filed, plaintiff was neither a property owner nor a
party to a contract to purchase, had no legally protected interest, and lacked standing.
Shipman & Associates, L.L.P., by Gary K. Shipman and William
G. Wright for plaintiff-appellant.
Hedrick, Eatman, Gardner & Kincheloe, L.L.P., by Jeffrey H. Blackwell and Shelley W. Coleman, for defendant-appellee Station One, Inc.
Beachcomber Properties, L.L.C. (plaintiff) appeals from an
order filed 22 August 2003 granting a motion to dismiss
in favor of
Station One Homeowners Association (Station One, defendant
(See footnote 1)
. Plaintiff filed an action for declaratory judgment and damages
for tortious interference with contractual relations, arising out
of Station One's adoption of an Amendment to the Declaration of
the Home Owners Association (amendment). The amendment prohibits
the transfer of any or all of [an] interest in a Unit in the form
of a Time Share or permit [a] Unit to be a part of a Time Share
Program. Plaintiff contends that Station One unlawfully imposed
a restraint on alienation and transfer of real property and
therefore, the amendment should be void and unenforceable.
Defendants Richard F. Cody and wife Janet B. Cody (defendant Codys) are residents of Frederick County, Maryland who own Station One Condominium Unit 8-J, located in the Town of Wrightsville Beach, New Hanover County, North Carolina (the property). Station One is a North Carolina non-profit corporation, operating as the homeowners association of the property owners of Station One Condominium and Town Home Complex (the Complex) located at Wrightsville Beach.
On 26 December 2002, the Codys entered into an offer to purchase and contract with plaintiff to sell the property. On 21 January 2003, plaintiff informed Station One it intended to purchase the property and offer the same for sale to multiple parties, and thus convert the property to a timeshare. Plaintiff also informed Station One that it had prospective purchasers whowere willing and able to purchase timeshares once the Cody sale was completed.
Thereafter, Station One through its general manager, circulated a letter dated 21 January 2003 to its members advising the owners of properties of the following:
A matter has arisen which is of great urgency to Station One. The Board has received information that a unit, the sale of which is pending, is to be converted to a time-share. The Board is concerned that this may be a first move towards the conversion of additional units to time-shares as well, which could adversely affect the value of your unit. Conversion of Station One units to time-shares could create real problems with the management and quality of your property. The Board has adopted a proposed amendment to the Declaration of Condominium for the purpose of preventing Station One units from being converted to time-share units. To amend the Declaration requires a vote of at least 2/3 of the total vote that may be cast, either by proxy or in person. A special meeting has been called specifically to vote on adopting the amendment. The meeting will be held Saturday, February 8, 2003 at 4:00 in the Social Room. Please complete and return the attached proxy, either by fax . . . or by mail in the enclosed stamped envelope, immediately. Time is of the essence. You should return the proxy even if you plan to attend the meeting. . . .
On 8 February 2003, Station One held its meeting of homeowners with knowledge of the contract between plaintiff and defendant Codys. The Station One homeowners voted to amend the Declarationto prohibit any unit holder from transferring any or all of his or her interest in a Unit in the form of a Time Share or permit his or her Unit to be a part of a Time Share Program. Station One recorded the amendment to the Declaration at the New Hanover County Register of Deeds on or about 10 February 2003.
On 14 February 2003, the contract between the Codys and the plaintiff was terminated due to prohibited use of the property as a timeshare unit. Plaintiff contends it intended to fulfill its contractual obligations with the Codys, but for the acts of Station One. Further, plaintiff contends it would have purchased or would have been actively seeking to purchase other condominiums within the complex to convert them into timeshares, but for the actions of Station One.
On 20 March 2003, plaintiff filed a complaint against Station One and the Faulks. On 27 May 2003, Station One responded by filing a motion to dismiss. On 30 July 2003, plaintiff amended its complaint by adding the Codys as defendants to the action. On 6 August and 18 August 2003, plaintiffs took a voluntary dismissal without prejudice as to the Faulks and Codys, respectively.
On 22 August 2003 the trial court entered an order granting Station One's motion to dismiss. Plaintiff appealed.
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