Chandelle Property Owners Association v. James Douglas Armstrong

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Chandelle Property Owners Association, Respondent,

v.

James Douglas Armstrong, Jane Armstrong, Kenneth L.
Galloway, Molly C. Galloway, Warren Johnson, Rhonda
Johnson, John K. Payne, Ruth G. Payne, and Jane Van
Wieren as Trustee of the Greer R.G. Irrevocable Property
Trust, dated October 26, 2006, and also all other persons
unknown, claiming any right, title, estate, interest in or
lien upon the real estate described in the complaint
herein, Defendants,

and

James Douglas Armstrong, Jane Armstrong, Warren
Johnson, Rhonda Johnson, John K. Payne, Ruth G.
Payne, and Jane Van Wieren as Trustee of the Greer R.G.
Irrevocable Property Trust dated October 25, 2006,
Third-Party Plaintiffs,

v.

Billy J. Israel, Bruce R. Goldberg, Cindy R. Goldberg,
and George Lynn Fleming in their personal and official
capacities, Third-Party Defendants,

and

Kenneth L. Galloway and Molly C. Galloway,
Third-Party Plaintiffs,

v.

Billy J. Israel, Bruce R. Goldberg, Cindy R. Goldberg,
and George Lynn Fleming, in their personal and official
capacities, Third-Party Defendants,

Of whom James Douglas Armstrong, Jane Armstrong,
Warren Johnson, Rhonda Johnson, John K. Payne, Ruth
G. Payne, and Jane Van Wieren as Trustee of the Greer
R.G. Irrevocable Property Trust dated October 25, 2006,
are the Appellants.

Appellate Case No. 2022-001557

Appeal From Spartanburg County
R. Keith Kelly, Circuit Court Judge

Opinion No. 6078
Heard June 4, 2024 – Filed August 7, 2024

AFFIRMED

Wendell L. Hawkins, of Wendell L. Hawkins, PA, of
Greer, for Appellants.

James P. Walsh and John D. Harjehausen, both of
Clarkson, Walsh & Coulter, P.A., of Greenville; and
Donald Ryan McCabe, Jr., of McCabe, Trotter &
Beverly, P.C., of Columbia, all for Respondent.

MCDONALD, J.: This case stems from several disputes within the Chandelle
Subdivision (Chandelle), a residential aviation community in Spartanburg County.
Appellants 1 contend the circuit court erred in granting Respondent Chandelle
Property Owners Association's (the POA) motion for partial summary judgment;
they assert association bylaws prohibited the POA from incurring debt in excess of

1
Appellants are the owners of properties generally known as Lots 1, 28, 29, 30, 31,
32, 33, 34, 35, 36, 37, 55, 56, and 57 within Chandelle (the Subject Lots).
$50,000 without a vote of the association and the declaration of covenants,
conditions, and restrictions (the Restrictive Covenants) allow annual assessments
to be used only for maintenance. Appellants challenge the circuit court's award of
back assessments to the POA and claim the assessments are "ostensibly attorney's
fees" in disguise. We affirm the circuit court's order granting partial summary
judgment.

Facts and Procedural History

In February 1997, CSC Developers, LLC and James P. Brockman, Sr. agreed to
develop approximately thirteen acres of Brockman's land as part of the Chandelle
subdivision. On December 16, 1997, CSC Developers recorded the Restrictive
Covenants (the Original Declaration) with the Register of Deeds for Spartanburg
County. The Original Declaration was subsequently amended and supplemented
(the Declaration).

The Original Declaration specified Lots 1 through 26 were subject to and bound by
the Restrictive Covenants:

NOW, THEREFORE, Declarant, by this
DECLARATION of Covenants, Conditions and
Restrictions does hereby declare that all the property
described herein and shown as lots 1 through 26 on the
Chandelle Subdivision plat dated September 24, 1997 by
Huskey & Huskey, Inc. for Spartanburg County, South
Carolina is and shall be held, transferred, sold, conveyed
and occupied subject to the covenants, conditions,
restrictions, easements, charges and liens set forth in the
Declaration which shall run with the real property and be
binding on all parties owning any right, title or interest in
said real property or any part thereof, their heirs,
successors and assigns, and shall inure for the benefit of
each owner thereof.

The Brockman land included on the plat referenced in the Original Declaration (the
Section 1 Plat) roughly encompassed Lots 1-10. Brockman was given a copy of
the Section 1 Plat and was aware his land was included there. Though the Section
1 Plat was approved for recording, CSC Developers kept it on file with the
Spartanburg County Planning Commission and sold the lots in Section 1 by
referencing individual lot surveys in order to save on taxes. Nevertheless, CSC
Developers intended that all of the property on the Section 1 Plat be part of the
Chandelle Subdivision and that this property—including Lots 1-10—would be
bound by the Declaration.2

The Declaration envisioned and authorized additional properties being subject to
the Declaration as lots were added to Chandelle. After the Original Declaration
was recorded, CSC Developers continued to expand Chandelle and recorded the
following plats for the newer sections of the community:

• Chandelle Section 1-A, recorded on September 1,
1998 in Plat Book 142, Pg. 376
o Depicting roads and Lots 13 and 22.
• Chandelle Section 2A, recorded November 8, 2000 in
Plat Book 149, Pg. 64
o Depicting Lots 50, 51, 52, 53, and 54
• Chandelle Section 3-A, recorded September 26, 2002
in Plat Book 153, Pg. 97
o Depicting Lot 39
• Chandelle Section 3, recorded November 5, 2004 in
Plat Book 156, Pg. 982
o Depicting Lots 39A, 40, 41, 42, 43, 44, 45, 46, and
47, and additional land.

On December 28, 2004, CSC Developers signed and recorded an instrument
annexing the following lots into Chandelle and subjecting them to the Declaration:
Chandelle Section 1A; Lot 39 (Section 3A) and Lots 39a and 40-47 (Section 3).

CSC Developers then recorded these plats for additional sections of Chandelle:

• Chandelle Section 4, recorded November 1, 2005 in
Plat Book 158, Pg. 840
o Depicting Lots 33 and 37
• Chandelle Section 7, recorded December 6, 2005 in
Plat Book 159, Pg. 9
o Depicting Lots 27 and 28

2
As of the date of the circuit court's order, CSC Developers had sold Lots 1, 5, 7,
8, 9, and 10. All of the deeds from Brockman to the initial purchasers of these lots
specifically reference the property as being subject to the Declaration.
• Chandelle Section 6, recorded December 14, 2006 in
Plat Book 160, Pg. 852
o Depicting Lots 29, 30, and 34

CSC Developers signed and recorded an April 17, 2007 instrument annexing the
following lots and subjecting them to the Declaration: Lots 33 and 37 (Section 4);
Lots 29, 30, and 34 (Section 6); and Lots 27 and 28 (Section 7).

They later recorded these plats:

• Chandelle Section 4A, recorded January 8, 2009 in Plat
Book 163, Pg. 885
o Depicting Lots 32 and 36
• Chandelle Section 5, recorded November 20, 2009 in Plat
Book 164, Pg. 709
o Depicting Lots 31 and 35
• Chandelle Section 8, recorded October 21, 2011 in Plat
Book 166, Pg. 249
o Depicting Lots 55, 56, and 57

CSC Developers recorded another instrument on November 2, 2011, annexing the
following lots and subjecting them to the Declaration: Lots 32 and 36 (Section
4A); Lots 31 and 35 (Section 5); and Lots 55, 56, and 57 (Section 8). However,
this recording differed in that POA board members Billy J. Israel, Jr. and Bruce
Goldberg signed the instrument.3 CSC Developers recorded a revised plat for

3
The circuit court's partial summary judgment order states:

[E]vidence was submitted to the Court that: (1) everyone
involved, including CSC Developers, LLC, thought that
this was the proper way to do it now that homeowners
had been appointed to the Board of Directors for
Plaintiff; (2) CSC Developers, LLC was in agreement
with the Board members signing the instrument and CSC
Developers, LLC knew it was being done; [(3)] CSC
Developers, LLC intended these lots be bound by the
Declaration and intended that this instrument bind them;
and (4) the Board members thought they were simply
Chandelle Section 8 on December 13, 2016 in Plat Book 171, Pg. 927. This plat
depicts Lots 55, 56, and revised Lot 57.

After various questions and disputes arose surrounding the development, the POA
brought this quiet title action, in part to remove any uncertainty as to which
properties were subject to and bound by the Declaration. 4 The POA then filed an
amended complaint adding a cause of action addressing negative reciprocal
easements. It later filed a second amended complaint seeking a declaratory
judgment that Appellants and others were subject to the Declaration on the
equitable theory of negative reciprocal easements; this amended complaint again
included the quiet title claim. 5 Appellants answered and asserted counterclaims
and third-party claims against Billy J. Israel, Jr., Bruce R. Goldberg, Cindy R.
Goldberg and George Lynn Fleming (the Third-Party Defendants).

On April 23, 2018, CSC Developers and Chandelle Runway, LLC, filed for
bankruptcy, and the circuit court stayed the consolidated actions. The United
States Bankruptcy Court lifted the automatic stay on May 21, 2020.

On November 3, 2020, the POA filed its third amended summons and complaint,
seeking determinations that Appellants and their properties (including the Subject
Lots) are subject to the Declaration and that Appellants are mandatory members of
the POA. This amended filing included claims for declaratory judgment, to quiet
title, and for reciprocal negative easements. In this filing, the POA also brought

certifying the instrument as being proper pursuant to
CSC Developers, LLC's authority.
4
A related dispute involving the central airfield and runway around which
Chandelle was developed bears mention. The Developers promised the original
owners the runway would be an amenity owned by the owners' association, but the
Developers reneged on this promise and conveyed the runway to a different entity.
Disagreements later arose among the Chandelle property owners regarding how
best to respond; some owners opposed taking action against the Developers and
eventually announced they were not part of the Association and were not bound by
the Declaration. Some stopped paying their assessments or took the position that
they would pay only those assessments with which they specifically agreed. After
some years of litigation, these owners conceded they were part of the Association.
5
The circuit court designated this litigation complex and consolidated it with other
related cases.
claims against Appellants to collect back assessments and other charges the POA
contends are owed. Each page of the third amended complaint states, "THIS
COMMUNICATION IS FOR THE PURPOSE OF COLLECTING A DEBT.
ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE."

Appellants answered the POA's third amended complaint and counterclaimed for
conversion, breach of fiduciary duty and bad faith, equitable indemnity, tortious
interference with contractual relations, fraud, declaratory relief, self-dealing,
negligence, an accounting, and breach of the Restrictive Covenants/breach of
contract. Appellants also brought third-party claims against certain current and
former directors of the POA. In a nutshell, the counterclaiming Appellants allege
improprieties regarding the levying and use of assessments and other charges under
the Declaration and POA bylaws.

On July 26, 2022, the POA and Third-Party Defendants moved to dismiss or
alternatively for partial summary judgment as to Appellants' counterclaims and
third-party claims. A later motion for partial summary judgment as to some of the
POA's claims sought: (1) an order that the Subject Lots are subject to and bound by
the Restrictive Covenants; (2) an order that Appellants are members of the POA;
(3) a monetary award of assessments and associated late charges and interest; and
(4) an award of attorney's fees and costs. The POA asserted no genuine issues of
material fact exist regarding the following:

1. John K. Payne, Ruth G. Payne (the "Paynes") – Lot 1
a. That the Paynes are the owners of Lot 1 in Chandelle
Subdivision.
b. That Lot 1 is subject to and bound by the Declaration
of Covenants, Conditions and Restrictions for Chandelle
Subdivision recorded on December 16, 1997, in the
Office of the Register of Deeds for Spartanburg County
in Book 67-A at Page 0583, as amended and
supplemented (as amended and supplemented, the
"Declaration").
c. That the Paynes are members of [the POA].
d. That the Paynes are delinquent in the payment of
assessments to [the POA] and owe [the POA]
assessments and associated late charges and interest.
[The POA] intends to hereafter file an affidavit setting
forth the amount of the debt owed by the Paynes to [the
POA].
2. Warren Johnson and Rhonda Johnson (the "Johnsons")
– Lots 28, 29, 30 & 34
a. That the Johnsons are the owners of Lots 28, 29, 30 &
34 in Chandelle Subdivision.
b. That Lots 28, 29, 30 & 34 are subject to and bound by
the Declaration.
c. That the Johnsons are members of [the POA].
d. That the Johnsons are delinquent in the payment of
assessments to [the POA] and owe [the POA]
assessments and associated late charges and interest.
[The POA] intends to hereafter file an affidavit setting
forth the amount of the debt owed by the Johnsons to [the
POA].

3. Jane Van Wieren as trustee of the Greer R.G.
Irrevocable Property Trust, dated October 25, 2006
("Van Wieren") – Lots 31, 32, 33, 35, 36, and 37
a. That Van Wieren is the owner of Lots 31, 32, 33, 35,
36, and 37 in Chandelle Subdivision.
b. That Lots 31, 32, 33, 35, 36, and 37 are subject to and
bound by the Declaration.
c. That Van Wieren is a member of [the POA].
d. That Van Wieren is delinquent in the payment of
assessments to Plaintiff and owes [the POA] assessments
and associated late charges and interest. [The POA]
intends to hereafter file an affidavit setting forth the
amount of the debt owed by Van Wieren to [the POA].

4. James Douglas Armstrong and Jane Armstrong (the
"Armstrongs") – Lots 55, 56, and 57
a. That the Armstrongs are the owners of Lots 55, 56, and
57 in Chandelle Subdivision.
b. That Lots 55, 56, and 57 are subject to and bound by
the Declaration.
c. That the Armstrongs are members of [the POA].
d. That the Armstrongs are delinquent in the payment of
assessments to Plaintiff and owe [the POA] assessments
and associated late charges and interest. [The POA]
intends to hereafter file an affidavit setting forth the
amount of the debt owed by the Armstrongs to [the
POA].

With its supporting memoranda, the POA attached numerous exhibits, including
POA President Billy J. Israel, Jr.'s affidavit detailing the amounts owed by
Appellants for assessments, late charges, and interest. At the time of this affidavit,
Israel had been the POA President and a member of its board of directors
continuously since 2010. Regarding assessments levied during his board tenure,
Israel affirmed: (1) Appellants John K. Payne and Ruth G. Payne paid all
assessments levied by the POA up until 2017, and they also paid a special
assessment levied in 2021; however, they have maintained a delinquent balance at
all times since 2017; (2) Appellants Warren Johnson and Rhonda Johnson paid all
assessments levied by the POA up until 2016; however, they have maintained a
delinquent balance at all times since 2016; (3) Appellant Jane Van Wieren (as
trustee of the Greer R.G. Irrevocable Property Trust, dated October 25, 2006) paid
all assessments levied by the POA up until 2016; however she/the trust has
maintained a delinquent balance at all times since 2016; and (4) Appellants James
Douglas Armstrong and Jane Armstrong paid all assessments levied by the POA
up until 2017, and they also paid a special assessment levied in 2017; however,
they have maintained a delinquent balance at all times since 2017. 6

Following a hearing,7 the circuit court issued two orders: (1) an October 19, 2022
order denying the POA's and Third-Party Defendants' motion to dismiss or
alternatively for partial summary judgment as to Appellants' counterclaims and
third-party claims; and (2) an October 29, 2022 order granting, in part, the POA's

6
Some of the assessments were special assessments, and with respect to Appellant
Jane Van Wieren as Trustee, some were assessments for runway use violations.
7
At this hearing, Appellants conceded they are likely part of the POA under the
theory of reciprocal negative easements. However, they argue genuine issues of
material fact remain surrounding the claimed back assessments. Appellants
contend at least some of the assessments resulted from the POA's violation of the
bylaws and Restrictive Covenants in incurring debt greater than $50,000 without
the required membership vote; they challenge other annual assessments as
improper based on their argument that such assessments are intended for
maintenance purposes only. It is important to note that some of the debt
Appellants now challenge has accrued over time—in part due to Appellants' own
failures to pay their assessments.
motion for partial summary judgment as to its own claims against Appellants for
monies due on unpaid assessments.

The circuit court found the Subject Lots were bound by the Restrictive Covenants
during the entirety of Appellants' ownership on several different grounds: (1) by
express language; (2) by plain and unmistakable implication/reciprocal negative
easements; and (3) through the exercise of the court's inherent equitable powers.
Additionally, the circuit court found Appellants, by virtue of their ownership of
property subject to the Restrictive Covenants, were mandatory members of the
POA. The circuit court's order explains that because the Subject Lots are governed
by the Restrictive Covenants, Appellants and the Subject Lots are subject to
assessments under the POA's governing documents. Although the circuit court
found no genuine issue of material fact existed as to the assessments Appellants
owe, it found genuine issues of material fact remain regarding interest and/or late
fees. Thus, the circuit court granted partial summary judgment to the POA for the
back assessments only, exclusive of any late charges and/or interest, as follows:

• Against John K. Payne and Ruth G. Payne – $22,000.00
• Against Warren Johnson and Rhonda Johnson – $24,000.00
• Against Jane Van Wieren as Trustee – $55,250.00
• Against James D. Armstrong and Jane Armstrong – $44,000.00

The circuit court also held in abeyance the POA's request for attorney's fees,
finding such fees should be determined at a later date. Appellants filed no Rule
59(e), SCRCP, motions but timely appealed on November 1, 2022.

Standard of Review

"In reviewing a grant of summary judgment, our appellate court applies the same
standard as the trial court under Rule 56(c), SCRCP." Woodson v. DLI Props.,
LLC, 406 S.C. 517, 528, 753 S.E.2d 428, 434 (2014). Rule 56(c) "provides that the
moving party is entitled to summary judgment 'if the [evidence before the court]
show[s] that there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.'" Kitchen Planners, LLC v.
Friedman, 440 S.C. 456, 459, 892 S.E.2d 297, 297 (2023) (alterations by the court)
(quoting Rule 56(c), SCRCP)). "In determining whether summary judgment is
proper, the court must construe all ambiguities, conclusions, and inferences arising
from the evidence against the moving party." Weston v. Kim's Dollar Store, 399
S.C. 303, 308, 731 S.E.2d 864, 866 (2012) (quoting Byers v. Westinghouse Elec.
Corp., 310 S.C. 5, 7, 425 S.E.2d 23, 24 (1992)).
Analysis

I. Partial Summary Judgment

Appellants contend the circuit court erred in granting partial summary judgment
because association bylaws prohibited the POA from incurring debt in excess of
$50,000 without a vote of the association, and the Restrictive Covenants allowed
annual assessments only for maintenance. We find the circuit court properly
granted partial summary judgment.

"Real covenants have been defined as 'agreement[s] . . . to do, or refrain from
doing, certain things with respect to real property.'" Queen's Grant II Horizontal
Prop. Regime v. Greenwood Dev. Corp., 368 S.C. 342, 361, 628 S.E.2d 902, 913
(Ct. App. 2006) (quoting 20 Am.Jur.2d Covenants, Conditions, and Restrictions §
1 (2005)). "Therefore, covenants, 'in a sense are contractual in nature and bind the
parties thereto in the same manner as would any other contract.'" Id. (quoting 20
Am.Jur.2d Covenants, Conditions, and Restrictions § 1 (2005). "Restrictive
covenants are construed like contracts and may give rise to actions for breach of
contract." Id.

"The cardinal rule of contract interpretation is to ascertain and give legal effect to
the parties' intentions as determined by the contract language." Whitlock v. Stewart
Title Guar. Co., 399 S.C. 610, 614, 732 S.E.2d 626, 628 (2012) (quoting McGill v.
Moore, 381 S.C. 179, 185, 672 S.E.2d 571, 574 (2009)). "Where the contract's
language is clear and unambiguous, the language alone determines the contract's
force and effect." Id. at 615, 732 S.E.2d at 628 (quoting McGill, 381 S.C. at 185,
672 S.E.2d at 574). "It is a question of law for the court whether the language of a
contract is ambiguous." Id. (quoting McGill, 381 S.C. at 185, 672 S.E.2d at 574).

Article VIII, Section 8.2(i) of the bylaws provides:

Section 8.2. Specific Powers and Duties. Without
limiting the generality of powers and duties set forth in
Section 8.1 above, the Board of Directors shall be
empowered and shall have the powers and duties as
follows:

....
(i) To borrow funds in order to pay for any expenditure
or outlay required pursuant to the authority granted by
the provisions of the Declaration and these By-Laws and
to authorize the appropriate officers to execute all such
instruments evidencing such indebtedness as the Board of
Directors may deem necessary; provided, however, that
the Board shall not borrow more than Fifty thousand and
no/100 ($50,000.00) Dollars or cause the Association to
be indebted for more than $50,000.00 at any one time
without prior approval of a majority of votes of both
classes of membership.
....

The circuit court's partial summary judgment order states:

The Subject Defendants also assert that the Plaintiff, by
and through its Board, violated Section 8.2(i) of the
Bylaws of Plaintiff by allegedly borrowing more than
$50,000.00 or incurring more than $50,000.00 in debt
without a vote of its members. While I don't reach the
merits of whether there has been any violation of Section
8.2(i) of the Bylaws, I find that even assuming arguendo
that a violation has occurred, it does not relieve the
Subject Defendants of their obligation to pay
assessments. Whether a debt was properly incurred is
independent of the Subject Defendants' obligation to pay
assessments. Even if a debt was improperly incurred by
Plaintiff, that debt is still an obligation of the Plaintiff
that Plaintiff is liable for. Like most homeowners'
associations, Plaintiff's primary means of funding its
obligations is through assessments levied against its
members. If the Court were to accept the Subject
Defendants' argument, it would mean for example that if
the Plaintiff were to borrow more than $50,000 without
member approval, then Plaintiff could never assess its
members to pay off that loan, forcing the Plaintiff to
default on the loan and suffer the adverse consequences
of a default. I find that such a position cannot be
sustained. Rather, if there has been any violation of
Section 8.2(i) of the Bylaws, I find that it does not
obviate the Subject Defendants' obligation to pay
assessments, without prejudice to whatever rights the
Subject Defendants may have, if any, to pursue claims
against the Plaintiff or its directors, individually or
derivatively, arising out of the alleged violation.

Because the circuit court's ruling was not based upon whether a question of fact
exists as to an alleged violation of Section 8.2(i) of the bylaws, we find Appellants'
argument here lacks merit. Notably, the circuit court found "even assuming
arguendo that a violation has occurred, it does not relieve the Subject Defendants
of their obligation to pay assessments." We agree with the circuit court that
Appellants' allegation of POA violations of Article XIII, Section 8.2(i) is
independent of any determination addressing their assessment obligations.

Further, we note Article XI, titled "Maintenance Assessments," includes the
following relevant language:

Section 11.1. Creation of the Lien and Personal
Obligation for Assessments. Declarant, for each Lot
owned within the Property, hereby covenants, and each
Owner of any Lot, by acceptance of a deed therefore,
whether or not it shall be so expressed in any such deed,
is deemed to covenant and agree to pay to the
Association:
a) Annual assessments or charges as provided in this
Declaration for the purpose of funding the maintenance
fund.
b) Special assessment for capital improvements and other
purposes as stated in this Declaration; such annual and
special assessments to be fixed, established and collected
from time to time as provided below.
c) Default assessments which may be assessed against an
Owner's Lot pursuant to the Chandelle Documents for
failure to perform an obligation under the Chandelle
Documents or because the Association has incurred an
expense on behalf of the Owner under the Chandelle
Documents. The annual, special and default assessments,
together with interest, costs and reasonable attorney's
fees, shall be a charge upon the land and shall be a
continuing lien upon the Lot against which each such
assessment is made until paid. Each such assessment,
together with interest, costs and reasonable attorney's
fees, shall also be the personal obligation of the Owner of
such Lot at the time when the assessment fell due.

Section 11.2. Purpose of Assessments. The assessments
levied by the Association shall be used exclusively to
promote the recreation, health, safety and welfare of the
Owners and occupants of Chandelle and for the
improvement and maintenance of the Common Areas,
including but not limited:
(a) to keep the Common Areas clean and free from debris
and to maintain any amenities located thereon in a clean
and orderly condition, to maintain the landscaping
thereon in accordance with the highest standards for
private parks including any necessary removal and
replacement of landscaping, and to repair, replace, and
provide for additions to the improvements as stated in the
Chandelle Documents.
(b) to pay all taxes, if any, levied against the Common
Areas and any properties owned by the Association.
(c) to install and maintain any light fixtures along roads
and streets in the Development to provide street lighting
therefore, as may be approved by the Association.
(d) to erect and maintain entrance signs at the entrances
to the Development and signs on the Common Areas,
said signs to be of standard construction and quality.
(e) to pay the premiums on all hazard insurance carried
by the Association on the Common Areas and all public
liability insurance carried by the Association pursuant to
the By-Laws.
(f) to provide such security services as may be deemed
reasonably necessary for the protection of the Common
Areas from theft, vandalism, fire and damage from
animals.
(h) to provide such garbage removal services as may be
approved by the Association for all Lots.

....
Section 11.5. Special Assessments. In addition to the
annual assessments authorized in Section 11.1 above, the
Board of Directors may levy in any fiscal year one or
more special assessments applicable to that year only for
the purpose of defraying, in whole or in part, the cost of
any construction or reconstruction, repair or replacement
of a described capital improvement on the open space or
Common Area, including the necessary fixtures and
personal property related thereto, or to make up any
shortfall in the current year's budget. Notice of the
amount and due dates for each special assessment must
be sent to each Owner at least (30) days prior to the due
date.

....

Section 11.7. Owner Liability. No Owner may waive or
otherwise exempt himself from liability for the
assessments provided for herein, including, by way of
illustration, but not limitation, abandonment of the Lot.
No diminution or abatement of any assessment shall be
claimed or allowed by reason of any alleged failure of the
Association to take some action or perform some
function required to be taken or performed by the
Association under this Declaration or the By-Laws or for
inconvenience or discomfort arising from the making of
repairs or improvements which are the responsibility of
the Association, or from any action taken by the
Association to comply with any law, ordinance, or with
any order or directive of any municipal or other
governmental authority, the obligation to pay
assessments being a separate and independent covenant
on the part of each Owner.

....

Section 11.9. Effect of Non-payment of Assessment;
Lien; Remedies of Association. Any Association
installment, whether pertaining to an annual, special or
default assessment, which is not paid within thirty (30)
days of its due date shall be delinquent. In the event that
an assessment installment becomes delinquent, the
Association, in its sole discretion may take any or all of
the following actions:
(a) Enforce a Late charge as provided in Section 8.2 (h)
of the By-Laws.
(b) Assess a late charge of at least 15% per delinquency.
(c) Assess an interest charge from the date of
delinquency at the rate per annum of 2 points above the
prime rate charged by the Association's bank or such
other rate as shall have been established by the Board of
Directors.
(d) Suspend the voting rights of the Owner during any
period of delinquency.
(e) Accelerate all remaining assessment installments for
the fiscal year in question so that unpaid assessments for
the remainder of the year shall be due and paid at once.
(h) Bring legal action against any owner personally
obligated to pay the delinquent installments.
(i) File a statement of lien with respect to the Lot, and
foreclose as set forth below:

....

Because a lot owner may not waive or otherwise exempt himself from assessments,
the circuit court found Appellants' obligation to pay their assessments exists
independently of their disagreement with the POA board's use of assessment funds,
its business judgment, or the incurring of more than $50,000 in debt in possible
violation of the bylaws. Perhaps more importantly, the POA has the right (and
likely the eventual duty) to "[b]ring legal action against any owner personally
obligated to pay the delinquent installments" under Section 11.9.

As a nonprofit corporation, the POA is subject to and governed by the South
Carolina Nonprofit Corporation Act of 1994 (the NCA).8, 9 Section 33-31-304 of
the NCA, which addresses ultra vires actions, provides:

8
S.C. Code Ann. §§ 33-31-101 to -1708 (1976 & Supp. 2023).
9
Appellants' reliance on Lovering v. Seabrook Island Property Owners
Association, is misplaced. 289 S.C. 77, 82, 344 S.E.2d 862, 865 (Ct. App. 1986)
§ 33-31-304. Ultra vires.

(a) Except as provided in subsection (b), the validity of
corporate action may not be challenged on the ground
that the corporation lacks or lacked power to act.

(b) A corporation's power to act may be challenged in a
proceeding against the corporation to enjoin an act where
a third party has not acquired rights. The proceeding
may be brought by the Attorney General, a director, or by
a member or members in a derivative proceeding.

(c) A corporation's power to act may be challenged in a
proceeding against an incumbent or former director,
officer, employee, or agent of the corporation. The
proceeding may be brought by a director, the corporation,
directly, derivatively, or through a receiver, a trustee, or
other legal representative, or in the case of a public
benefit corporation, by the Attorney General.

S.C. Code Ann. § 33-31-304 (2006). The Official Comment to Section 33-31-304
states:

The object of section 3.04 is to do away with the ultra
vires doctrine. This long-discredited concept is based on
the fiction that third parties dealing with corporations
have constructive notice of limitations on corporate
purposes and powers appearing in articles of
incorporation. In the heyday of the ultra vires doctrine,
innocent third persons or not-so-innocent corporations
could have corporate acts and contracts declared void or
unenforceable on the ground that they were beyond the
corporate purposes or that the corporation had no power
to enter into the transaction. Ballentine, "Proposed
Revision of the Ultra Vires Doctrine," 12 Corn. L.Q. 453
(1927).

aff'd as modified on other grounds, 291 S.C. 201, 352 S.E.2d 707 (1987) overruled
on other grounds by S.C. Code Ann. § 33-31-302.
S.C. Code Ann. § 33-31-304. The Official Comment further explains:

If a corporation has entered into or completed an ultra
vires transaction, a proceeding can be brought against the
present or former directors, officers, employees, or
agents who caused the corporation to act in violation of
limitations contained in its articles. In such a situation a
third party who had acquired rights could enforce the
ultra vires action even though it violated a specific
provision of the articles. However, a director approving
such a contract would be liable if the director breached
his or her duty of care or loyalty. The amount of money
damages, if any, for violation of this section is left to the
sound discretion of the courts. Similarly the
circumstances in which an injunction will issue is left to
judicially developed equitable principles.

S.C. Code Ann. § 33-31-304. Likewise, the South Carolina Reporters' Comments
to section 33-31-304 make clear that once a claimed ultra vires transaction has
occurred, the challenger's remedy is to pursue an action against the individual or
parties who caused the corporation to act in an ultra vires manner.

Appellants contend the POA's ultra vires act was its exceeding of the debt limit.
See Seabrook Island Prop. Owners Ass'n v. Pelzer, 292 S.C. 343, 347, 356 S.E.2d
411, 414 (Ct. App. 1987) ("[A] corporation may exercise only those powers which
are granted to it by law, by its charter or articles of incorporation, and by any
bylaws made pursuant thereto; acts beyond the scope of the powers so granted are
ultra vires."). And, although Appellants do not allege the POA lacks the power to
levy assessments against its members, they do challenge the purposes for which the
governing documents permit such funds to be used.

It appears Appellants' arguments regarding Section 8.2(i) and the debt limit are
circular attempts to justify their own nonpayment of assessments. Moreover, their
argument that the POA cannot use assessments to pay legal fees contradicts
Section 11.9(h), which specifically provides the POA may bring legal action for
nonpayment of assessments. Because the POA's only means of funding its
obligations is through assessments levied against its members, it stands to reason
that the POA may rely on such funds when "[bringing] legal action against any
owner personally obligated to pay the delinquent installments."
Additionally, Article XIII, Section 13.9 specifically provides for the recovery of
costs and attorney's fees:

Section 13.9. Recovery of Costs. If legal assistance is
obtained to enforce any of the provisions of the
Chandelle Documents, or in any legal proceeding
(whether or not suit is brought) for damages or for the
enforcement of the Chandelle Documents or the restraint
of violations of the Chandelle Documents, the prevailing
party shall be entitled to recover all costs incurred by it in
such action, including reasonable attorney’s fees as may
be incurred, or if suit is brought, as may be determined
by the Court.

In sum, Chandelle's governing documents clearly contemplate that the POA can
and will incur attorney's fees. And, such attorney's fees would fall within the broad
purposes for which assessments may be used as set forth in Section 11.2—to
"promote the recreation, health, safety and welfare of the Owners and occupants of
Chandelle." For all of these reasons, we affirm the circuit court's order granting
partial summary judgment.

II. Retroactive Award

Appellants further argue the circuit court erred in retroactively awarding back
assessments. We disagree.

The circuit court found the Lots are subject to and have been bound by the
Declaration for at least the entirety of Appellants' ownership for three reasons: (1)
the properties were expressly bound by the Declaration; (2) the properties were
bound by the Declaration through reciprocal negative easements/unmistakable
implication; and (3) the properties were bound by the Declaration through the
exercise of the court's inherent equitable powers.

Appellants failed to challenge findings (1) and (3) in their statement of issues on
appeal. See Rule 208(b)(1)(B), SCACR ("Ordinarily, no point will be considered
which is not set forth in the statement of the issues on appeal."); but see Herron v.
Century BMW, 395 S.C. 461, 466, 719 S.E.2d 640, 642 (2011) ("When an issue is
not specifically set out in the statements of issues, the appellate court may
nevertheless consider the issue if it is reasonably clear from an appellant's
arguments." (emphasis in original)). Additionally, as the POA properly notes,
"[u]nder the two[-]issue rule, where a decision is based on more than one ground,
the appellate court will affirm unless the appellant appeals all grounds because the
unappealed ground will become the law of the case." Skywaves I Corp. v. Branch
Banking & Tr. Co., 423 S.C. 432, 451, 814 S.E.2d 643, 653–54 (Ct. App. 2018)
(quoting Jones v. Lott, 387 S.C. 339, 346, 692 S.E.2d 900, 903 (2010)).

Because Appellants did not appeal findings (1) and (3), we affirm the circuit
court's finding that the Subject Lots have been subject to and bound by the
Declaration for the entirety of their ownership. However, even if the two-issue
rule did not apply, Appellants have conceded the Subject Lots are bound by the
Declaration via the doctrine of reciprocal negative easements. It is further
undisputed that Appellants took title to their properties after CSC Developers
recorded the Declaration and common scheme of development and that Appellants
were aware the Declaration would govern the Association. There is no dispute that
the challenged assessments were levied after such time. Thus, we find the circuit
court did not "retroactively" award anything, and we affirm on this point as well.

III. Debt Collection Action and Timing of Claims

Appellants next argue the circuit court erred in entering judgment on the claimed
debts through "equitable action" prior to a jury's consideration of their compulsory
legal counterclaims and failed to require the POA to exhaust other legal remedies
before entering judgment for the assessments owed. We disagree.

Initially, it appears Appellants have abandoned their exhaustion theory by
providing only a summary argument. See Rule 208(b)(1)(D), SCACR (requiring
"discussion and citations of authority" for each issue in an appellant's brief); see
also Glasscock, Inc. v. U.S. Fid. & Guar. Co., 348 S.C. 76, 81, 557 S.E.2d 689,
691 (Ct. App. 2001) ("South Carolina law clearly states that short, conclusory
statements made without supporting authority are deemed abandoned on appeal
and therefore not presented for review."). More significantly, Appellants failed to
raise this question to the circuit court. See Staubes v. City of Folly Beach, 339 S.C.
406, 412, 529 S.E.2d 543, 546 (2000) ("It is well-settled that an issue cannot be
raised for the first time on appeal, but must have been raised to and ruled upon by
the trial court to be preserved for appellate review."). In any event, for the reasons
discussed in Sections I and II, we find the circuit court properly awarded partial
summary judgment to the POA as to the assessments owed based on the language
of the governing documents.10

In a related argument, Appellants cite Johnson v. South Carolina National Bank,
292 S.C. 51, 55–56, 354 S.E.2d 895, 897 (1987), for the proposition that they are
entitled to have a jury hear their compulsory counterclaims before any equitable
claims related to implied covenants may be resolved. But Johnson cannot be
construed as prohibiting summary judgment when otherwise proper simply
because a defendant has asserted a legal counterclaim. See, e.g., SSI Med. Servs.,
Inc. v. Cox, 301 S.C. 493, 502, 392 S.E.2d 789, 794 (1990) (explaining "when
summary judgment for the plaintiff on its claim is otherwise appropriate, we view
it as proper to grant the motion" despite the presence of a counterclaim).

IV. Discovery

Appellants also challenge the award of back assessments as premature based on
their contention that discovery was not yet complete. We find no error on this
point.

Appellants assert that at the time of the circuit court's summary judgment hearing,
the deposition of the POA's relatively new Treasurer, Jeff Cooper, had been
scheduled but cancelled. They argue in their brief to this court that:

Jeff Cooper's deposition was taken after the hearing and
revealed that the Association was still in debt to its
lawyers in the approximate amount of $166,000.00. This
fact would have given Appellants more conclusive
evidence that the Plaintiff and Board Members violated
the prohibitions of the By-Laws prior to the institution of
the lawsuit and had continued to violate the prohibitions
of the By-Laws throughout the entire lawsuit. This fact
would have also lent more credence to the Appellants'
equitable defense of unclean hands and equitable
estoppel.

(internal citation omitted).

10
We further note it is unclear what legal remedies Appellants are referencing in
arguing the circuit court committed an error of law by failing "to require [the POA]
to exhaust its legal remedies before awarding the money damages."
In addressing Appellants' contention that the Cooper deposition provides evidence
of the alleged bylaws violations, we again note the circuit court's awarding of the
unpaid assessments was independent of any consideration of whether there has
been a POA violation of Article VIII, Section 8.2. The circuit court found "even
assuming arguendo that a violation has occurred, it does not relieve the Subject
Defendants of their obligation to pay assessments." Although it remains to be seen
whether Cooper's deposition creates a question of material fact as to the claimed
violations, this does not affect the circuit court's rulings on the assessments owed.
Accordingly, we find the circuit court's grant of partial summary judgment was
neither premature nor otherwise erroneous.

V. Attorney's Fees

Finally, Appellants argue the circuit court erred in failing to recognize the claimed
back assessments are "ostensibly attorney's fees" in disguise, and disregarded the
requirements of Jackson v. Speed, 326 S.C. 289, 307-08, 486 S.E.2d 750, 759-60
(1997) (setting out factors for determining a reasonable attorney's fee).
It is undisputed that the POA has incurred attorney's fees—including those related
to this lawsuit—and that some portion of the $145,250.00 in assessments awarded
would likely help pay such expenses. However, the circuit court did not "award
attorney's fees" such that a review of the Jackson factors was required. The circuit
court's award was for unpaid assessments. It held the question of attorney's fees in
abeyance for consideration at a later date.

Conclusion

For these reasons, the circuit court's order granting partial summary judgment is

AFFIRMED.

THOMAS, J., and VERDIN, A.J., concur.