Hinson v. Stafford Park HOA

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT
BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE
268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Robert Hinson,
a.k.a. Robert H. Hinson, Jr., Appellant,

v.

Stafford Park
HOA, Inc., Ernest Nyeguard, Richard Spatola, Mike Bailey, Individually and as
Officers of Stafford Park HOA, Inc., Respondents.

Appeal From York County

Lee S. Alford, Circuit Court Judge

Unpublished Opinion No.   2010-UP-568

Submitted December 1, 2010 – Filed
December 31, 2010

AFFIRMED

James W. Boyd, of Rock Hill, for Appellant.

Brian Scott McCoy, of Rock Hill, for Respondents.

PER CURIAM:  Robert Hinson appeals the order from a bench trial
finding that the Stafford Park Homeowners Association's (Stafford Park) bylaws
materially complied with the Declaration of Covenants and the statutes of this
State.  As such, the court found that Stafford Park's Board of Directors was
properly elected and its members acted within the scope of their office and in
furtherance of the association's affairs when they assessed fees and filed a
lien of foreclosure on Hinson's property.  We affirm.[1]

Hinson asserts that Stafford Park did not have the power to set and assess fees
because bylaws conforming to the Restrictive Covenants were never properly
placed into effect.  He also asserts that Stafford Park lacked the power to
assess member fees because the common areas and amenities were not owned by
Stafford Park before 2005.  As Hinson cites no authority to support the
reversal of the trial court's ruling on these issues, we find them
abandoned on appeal.  See Rule 208(b)(1)(D) SCACR ("[T]he particular
issue to be addressed shall be set forth in distinctive type, followed by
discussion and citations of authority."); First Sav. Bank v. McLean, 314 S.C. 361, 363, 444 S.E.2d 513, 514 (1994) (considering an issue abandoned because the appellant
failed to provide pertinent argument or supporting authority); Jones v. S.C. Dep't of Health & Envtl. Control, 384
S.C. 295, 317, 682 S.E.2d 282, 294 (Ct. App. 2009) (deeming an issue abandoned
on appeal if the argument is conclusory and unsupported by authority); Bennett
v. Investors Title Ins. Co., 370 S.C. 578, 599, 635 S.E.2d 649, 660 (Ct.
App. 2006) (noting an issue is abandoned on appeal when the appellant fails to
cite any supporting authority for his position and makes only conclusory
arguments).

As to whether the circuit court erred in holding Stafford Park's officers were validly elected and had
the authority to maintain and assess member fees in accordance with the
Restrictive Covenants, Stafford Park's bylaws, and the statutes of this State,
we affirm.  Section 6.3(a) of the Restrictive Covenants states that Stafford
Park's bylaws shall provide for "[t]he control of the Association by a
Board of no less than five Directors who shall be elected by simple majority
vote of the [o]wners present . . . at an annual meeting called for such purpose
at which a simple majority shall constitute a quorum."  The Stafford Park
Homeowners Association By-Laws Section II.F. explains how a quorum is formed
(using the joinder method) to reach a simple majority.  It states, "[t]he
joinder of a member in the action of a meeting by signing and concurring in the
minutes thereof shall constitute the presence of such member for the purpose of
determining a quorum."  Although there is no South Carolina case law
specifically on point, section 33-31-140(1)(a) of the South Carolina Code
(2006) states that members entitled to vote on an issue may approve it by the
"affirmative vote of a majority of the votes of the members represented
and voting at a duly held meeting at which a quorum is present or the
affirmative vote of the greater proportion . . . of the members . . . as the .
. .  bylaws . . . may provide . . . ."  Section 33-31-140(1)(b) enables a
member to approve a vote by "a written ballot or written consent in
conformity with this chapter."  Thus, the joinder method of achieving a
quorum to attain a majority vote as stated in Stafford Park's bylaws comports
with the Restrictive Covenants and the statutes of this State.    

Regarding the
assessment of fees, section 33-31-302(15) of the South Carolina Code (2006)
states in part, "[E]very corporation has . . . the same powers as an
individual . . . to do all things necessary or convenient to carry out its
affairs including, without limitation, power . . . to impose dues, assessments,
and admission and transfer fees upon it members . . . ."  Section 7.1 of
the Restrictive Covenants also provides "[a]ll covenants, restrictions, and affirmative obligations set forth in
this Declaration shall run with the land and shall be binding upon all persons,
firms, and corporations owning any interest in the lands now or hereafter
affected by the Declaration . . . ."  The language of Stafford Park
Homeowners Association By-laws Section IV.A.1. states in part:

[E]ach member is deemed to covenant and [to] agree to
pay . . . to the Association, annual assessments or charges, . . . .  The
annual and special assessments, together with such interest thereon and costs
of collection thereof, as hereinafter provided shall be a charge on the land
and shall be a continuing lien upon the property against which each assessment
is made.  Each such assessment, together with such interest, costs and
reasonable attorney's fees shall also be the personal obligation of the person
who was the owner of such property at the time when the assessment fell due . .
. .  

Pursuant to section 27-31-170
of the South Carolina Code (2007), "[e]ach co‑owner shall comply
strictly with the bylaws and with the administrative rules and regulations
adopted pursuant thereto . . . ."; see also Cedar Cove Homeowners Ass'n, Inc. v. DiPietro, 368 S.C. 254, 270, 628
S.E.2d 284, 292 (Ct. App. 2006) ("Restrictive
covenants often authorize the creation of a homeowners' association, usually in the form of a not-for-profit
corporation, and grant it authority to manage common areas, make regulations,
levy assessments, and other similar privileges.")
(citations omitted); Harbison Cmty. Ass'n, Inc. v. Mueller, 319 S.C. 99,
102, 459 S.E.2d 860, 862 (Ct. App. 1995) ("Covenants requiring property
owners to pay fees for improvements, maintenance or other services to a homeowners association run with the
land."); First Fed. Sav. & Loan Ass'n of Charleston v. Bailey,
316 S.C. 350, 354, 450 S.E.2d 77, 79 (Ct. App. 1994) ("Covenants requiring
the payment of maintenance assessments are contractual in
nature and bind the parties to the covenants in the same manner as other
contracts.").  Therefore, we find Stafford Park acted with proper
authority when it maintained and assessed member fees.       

Finally, as to
whether the trial court erred in
holding that Stafford Park and its board members acted within the scope of
their powers and were protected by the business judgment rule, we affirm.  A corporation can only exercise the powers
granted to it by law, its charter or articles of incorporation, and any bylaws made pursuant
thereto.  Lovering v.  Seabrook Island Prop. Owners Ass'n, 289 S.C. 77,
82, 344 S.E.2d 862, 865 (Ct. App. 1986), aff'd as modified on other grounds,
291 S.C. 201, 203, 352 S.E.2d 707, 708 (1987), superseded on other grounds
by S.C. Code Ann. § 33-31-302.  "Acts beyond the scope of a
corporation's powers as defined by law or its charter are ultra vires."  Id.; see also Kuznik v. Bees Ferry Assocs., 342 S.C. 579,
599, 538 S.E.2d 15, 25 (Ct. App. 2000) ("Under the business judgment rule, a court will not
review the business judgment of a corporate governing board when it acts within
its authority and it acts without corrupt motives and in good faith."); Goddard
v. Fairways Dev. Gen. P'ship, 310 S.C. 408, 414, 426 S.E.2d 828, 832 (Ct.
App. 1993) ("In a dispute between the directors of a homeowners
association and aggrieved homeowners, the conduct of the directors should be
judged by the 'business judgment rule' and absent a showing of bad faith, dishonesty, or
incompetence, the judgment of the directors will not be
set aside by judicial action.").  The business judgment rule only applies to intra
vires acts, not ultra vires ones.  Id. at 605, 538 S.E.2d at
28; see also Dockside Ass'n, Inc. v. Detyens, 291 S.C. 214, 216, 352
S.E.2d 714, 716 (Ct. App.), aff'd, 294 S.C. 86, 362 S.E.2d 874
(1987) ("A court should be reluctant to question action taken intra
vires by the governing board of a non-profit corporation.").  Stafford
Park was acting within the scope of its powers granted pursuant to the language
in the Restrictive Covenants, its bylaws, and the statutes of this State.   Therefore,
Stafford Park's actions were intra vires and protected by the business
judgment rule.

Accordingly, the
judgment herein is

AFFIRMED.

THOMAS,
PIEPER, and GEATHERS, JJ., concur.

[1] We decide this case without oral argument pursuant to
Rule 215, SCACR.