Ocean Sands Property v Munns, (04-304) 03/15/2005

Appeal by plaintiff from judgment entered 21 November 2003 by Judge Paul M. Quinn in Carteret County District Court. Heard in the Court of Appeals 20 October 2004.

The Harris Law Firm, PLLC, by R. Andrew Harris, for plaintiff- appellant.

Mason & Mason, PA, by L. Patten Mason, for defendants- appellees.

    CALABRIA, Judge.

    Ocean Sands Property Owners Association, Inc., (“plaintiff association”) appeals an order granting summary judgment to James C. Munns, Jr., and Sandra Munns (collectively “defendants”) in a dispute concerning whether plaintiff association properly followed the procedure established by their declaration and bylaws to pass changes in the unit owners' assessments for water and premium cable television (“premium cable”). We affirm.
    Plaintiff association is the governing body of Ocean Sands Condominiums (“Ocean Sands”), a 108-unit condominium complex located in Atlantic Beach. Pursuant to the “Declaration of UnitOwnership and Covenants, Conditions and Restrictions of Ocean Sands Condominiums” (the “declaration”), each unit is conveyed separately and consists of a single general purpose room and a bathroom. The only exception is that seven pairs of inter- connecting units, termed “Paired Units” by the declaration, are conveyed as single entities. In certain “Paired Units,” the rooms of one unit consist of a kitchen and living room but no bathroom and the rooms in the adjoining unit consist of a bedroom and bathroom. Defendants own units 152 and 154, which are “Paired Units” with one unit consisting of a kitchen and living room and the other, a bedroom and bathroom.
    On a quarterly basis, Ocean Sands charges each unit owner assessments for: (1) dues; (2) premium cable; (3) insurance; and (4) water. Prior to connection to the municipal water system, water was supplied from onsite wells, and whether the water costs were assessed at a flat rate or pro rata is unclear from the record. In November of 1992, the Board of Directors for plaintiff association decided, based on the municipality's flat, per-unit charge for water, that after connection to the municipal water system the water costs would likewise be a flat, per-unit assessment, and since certain “Paired Units” had only one bathroom, plaintiff association planned to assess them as single units. In 1993, Ocean Sands was connected to the Town of Atlantic Beach's water system. After connection, the municipality charged plaintiff association for 103 units instead of 108 units, which accounted for certain “Paired Units,” including those belonging to defendants,being assessed as single units.   (See footnote 1) No meters were attached to the Ocean Sands' units to measure individual unit water usage. Certain “Paired Units,” including those belonging to defendants, were also assessed as single units for premium cable.
    On 4 September 1999, at plaintiff association's annual meeting, a quorum majority of unit owners, forty-eight of seventy- nine, voted to assess water and premium cable “to all units . . . based upon their ownership interest in the common areas.” The plaintiff association's vote sought, pursuant to the declaration and the “By-Laws of Ocean Sands Condominiums Owner's Association” (the “bylaws”), to designate water and premium cable costs as common expenses and implement pro rata assessments for these services to all units, including both units in certain “Paired Units” previously assessed as single units. Subsequently, those “Paired Units” previously assessed as single units, started being assessed as two units for both water and premium cable. As a result of the changes, defendants' quarterly assessment for water increased from around twenty-six dollars to slightly more than forty-seven dollars, an increase of approximately eighty percent, and their assessment for premium cable doubled from approximately ten to slightly more than twenty dollars. Notwithstanding the changes, defendants continued to pay water and premium cable assessments for a single unit only. They justified paying in thismanner by contending plaintiff association's vote, which instituted pro rata water and premium cable assessments for all units, was not passed by the percentage of unit owners required under the declaration and the bylaws.
    On 23 February 2001, plaintiff association filed suit against defendants to collect the unpaid portions of defendants' water and premium cable assessments. Both parties moved for summary judgment. On 24 November 2003, the trial court denied plaintiff association's summary judgment motion and granted summary judgment to defendants. Plaintiff association appeals.
    As an initial matter, we note that plaintiff association violated N.C. R. App. P. 13(a)(1) by failing to file its brief in a timely manner. In pertinent part, N.C. R. App. P. 13(a)(1) provides:
        Within 30 days after the clerk of the appellate court has mailed the printed record to the parties, the appellant shall file his brief in the office of the clerk of the appellate court, and serve copies thereof upon all other parties separately represented. Within 30 days after appellant's brief has been served on an appellee, the appellee shall similarly file and serve copies of his brief.

The Clerk of the North Carolina Court of Appeals (the “clerk”) mailed the printed record to the parties on 15 April 2004. The thirtieth day after 15 April was 15 May, a Saturday, which under N.C. R. App. P. 27(a) extended plaintiff association's time for filing its brief to the following Monday, 17 May. Plaintiff association's brief was filed with the clerk on 18 May, thirty-one days after the record was mailed. Plaintiff association made nomotion to this Court for an extension of time as provided under N.C. R. App. P. 27(c). Accordingly, plaintiff association's brief was not timely filed.
    Nonetheless, in its reply brief, plaintiff association contends its brief was timely filed and cites N.C. R. App. P. 27(b), which provides, “Whenever a party has the right to do some act or take some proceedings within a prescribed period after the service of a notice or other paper upon him and the notice or paper is served upon him by mail, three days shall be added to the prescribed period.” (Emphasis added). Plaintiff association argues that because the record was “served by mail” by the clerk, plaintiff association had three additional days to file its brief, just as an appellee has three additional days if an appellant serves its brief upon the appellee by mail.
    Under N.C. R. App. P. 13(a)(1), however, the appellant must file his brief “[w]ithin 30 days after the clerk . . . has mailed the printed record to the parties . . . .” (Emphasis added). Whereas, the appellant must “serve copies [of his brief] upon all other parties separately represented.” Id. (emphasis added). Therefore, the plain language of N.C. R. App. P. 13(a)(1) indicates that the clerk's mailing of the record to the parties is distinct from “service of a notice or other paper” upon a party, such as service of an appellant's brief upon an appellee. N.C. R. App. P. 27(b) (emphasis added). Moreover, N.C. R. App. P. 27(b)'s purpose is to offset the time a mailed notice or paper spends in transit so that the recipient, who is unaware of the document's contents, mayhave a full thirty days to respond. In contrast, an appellant is able to file the record on appeal only after it is settled. N.C. R. App. P. 12(a) (requiring the appellant to file the record on appeal within fifteen days after it is settled). Accordingly, the appellant is deemed aware of the record's contents the moment it is filed. Therefore, even if the record were settled by the parties, filed by the appellant, and mailed by the clerk on the same day, the rules ensure the appellant's awareness of the record's contents for a minimum of thirty days prior to the time for filing the appellant's brief. Accordingly, the additional three days provided under N.C. R. App. P. 27(b) to parties receiving service by mail does not apply to the thirty days given an appellant under N.C. R. App. P. 13(a)(1) to file his brief after the clerk has mailed the printed record to the parties. Although plaintiff association's violation of N.C. R. App. P. 13(a)(1) subjects the instant appeal to dismissal, Marsico v. Adams, 47 N.C. App. 196, 197, 266 S.E.2d 696, 698 (1980), pursuant to N.C. R. App. P. 2, we elect in our discretion to address the appeal on the merits.   (See footnote 2)
    Plaintiff association asserts the trial court erred by denying its summary judgment motion and granting summary judgment to defendants. This Court reviews de novo a trial court's grant of summary judgment. Shroyer v. County of Mecklenburg, 154 N.C. App. 163, 167, 571 S.E.2d 849, 851 (2002). “Summary judgment isappropriate where 'the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact' and that a party is entitled to judgment as a matter of law.” Floyd v. Integon Gen. Ins. Corp., 152 N.C. App. 445, 448, 567 S.E.2d 823, 826 (2002) (quoting N.C. Gen. Stat. § 1A-1, Rule 56). The parties agree that the material facts were undisputed and that the only issue before the trial court was a question of law, specifically whether plaintiff association properly voted to institute pro rata water and premium cable assessments for all units, including certain “Paired Units” previously assessed as single units. We agree summary judgment was appropriate.
    Plaintiff association argues that its vote implementing pro rata water and premium cable assessments to all units was proper pursuant to Chapter 47A of the North Carolina General Statutes, the declaration, and the bylaws. Under N.C. Gen. Stat. § 47A-12 (2003):
        The unit owners are bound to contribute pro rata, in the percentages computed according to G.S. 47A-6 of this Article, toward the expenses of administration and of maintenance and repair of the general common areas and facilities and, in proper cases of the limited common areas and facilities, of the building and toward any other expense lawfully agreed upon.

(Emphasis added). In pertinent part, N.C. Gen. Stat. § 47A-28 (2003) states:
        (a) All unit owners . . . shall be subject to this Article and to the declaration and bylaws of the association of unit owners adopted pursuant to the provisions of this Article.        (b) All agreements, decisions and determinations lawfully made by the association of unit owners in accordance with the voting percentages established in the Article, declaration or bylaws, shall be deemed to be binding on all unit owners.

(Emphasis added). Accordingly, N.C. Gen. Stat. §§ 47A-12 and 28 grant plaintiff association the power to adjust assessments if lawfully agreed upon in accordance with the applicable voting percentages. Moreover, appellees do not contend plaintiff association lacks the authority, upon a proper vote, to designate water and premium cable costs as common expenses and implement pro rata charges for those costs to all units.
    The voting percentage necessary to change assessments is not stated in Chapter 47A. Therefore, the dispositive issue is whether plaintiff association obtained the proper voting percentage established by the declaration and the bylaws as necessary to institute pro rata water and premium cable assessments. As with any contract, we will interpret the declaration and the bylaws according to the intent of the parties. Bueltel v. Lumber Mut. Ins. Co., 134 N.C. App. 626, 631, 518 S.E.2d 205, 209 (1999). “If the plain language of a contract is clear, the intention of the parties is inferred from the words of the contract.” Walton v. City of Raleigh, 342 N.C. 879, 881, 467 S.E.2d 410, 411 (1996).
    Article two, paragraph eight, of the bylaws states, “'Assessment' shall mean and refer to a Member's share of the common expenses assessed against each unit by the Association in the manner provided for in the Declaration and these By-Laws.” Under section nine of the declaration, entitled “Assessment”:        Each owner of any unit, by acceptance of the deed thereto . . . does thereby covenant and agree to pay assessments in a pro rata share equivalent to such unit's ownership interest in the common areas . . . for the common expenses of the upkeep, maintenance and improvement of the common area and for expressly designated services provided to all unit owners in the condominium project.

Section ten of the declaration, entitled “Purposes of Assessments” states in pertinent part:
        The assessments paid to the Association shall be used exclusively to promote the recreation, health, safety and welfare of the residents of [Ocean Sands] and, in particular, . . . for the use and enjoyment of the common area and facilities, including, but not limited to, the cost of water and sewer service . . . .

Under section eleven of the declaration, entitled “Change in Assessments”:
        At any time after the actual assumption of management duties by the Association and the establishment of the initial budget and assessment . . . its Board of Directors . . . shall have the right to increase said assessment in any one year without the approval of the membership of an amount not to exceed fifteen (15%) percent of the assessment of the previous year. The assessment may be increased without limit by a vote of two thirds of the members of the Association voting in person or by proxy at a regular annual meeting or at a meeting duly called for this purpose.

(Emphasis added). Under article four, paragraph four, of the bylaws:
        The presence at a meeting of Members entitled to cast, or of proxies entitled to cast, fifty (50%) percent of the votes of the Association on the basis of common area ownership interests shall constitute a quorum for any action except as otherwise provided in the Declaration or these By-Laws.
    Although the water costs for the common areas was an expressly designated common expense under section ten of the declaration, the declaration made no provision for the individual unit's water costs. Furthermore, the evidence in the record indicates that Ocean Sands' entire water costs had been billed to the unit owners via a flat, per-unit assessment, with certain “Paired Units” each being assessed as single units. These “Paired Units” were also assessed for premium cable as single units.
    Under section nine of the declaration and article four, paragraph four, of the bylaws, plaintiff association could properly vote by a quorum majority to expressly designate water and premium cable costs as common expenses and to assess these costs pro rata for all units, including those “Paired Units” previously assessed as single units. However, under section eleven of the declaration and article two, paragraph eight, of the bylaws, when expressly designating these services as common expenses and instituting pro rata assessments for all units would raise a unit owner's assessment for a particular service above fifteen percent of the prior year's assessment, “a vote of two thirds of the members of [plaintiff association] voting in person or by proxy” is required to properly institute the assessment change.
    The vote instituting pro rata assessments to all units for the water and premium cable costs resulted in an increase of approximately eighty percent for defendants' water assessment and doubled their premium cable assessment. The changes in the assessments were instituted at plaintiff association's 4 September1999 meeting by a quorum majority, consisting of forty-eight of seventy-nine unit owners. It is undisputed that the forty-eight unit owners voting in favor of the changes in the water and premium cable assessments fell short of the sixty-six and two-thirds percent vote required to increase an assessment over fifteen- percent of the prior year's assessment. Therefore, plaintiff association did not obtain the proper voting percentage established by the declaration and the bylaws as necessary to properly institute the changes in the water and premium cable assessments. Accordingly, the trial court did not err in denying plaintiff association's summary judgment motion and granting summary judgment to defendants.
    Affirmed.
    Judges STEELMAN and GEER concur.
    Report per Rule 30(e).

Footnote: 1