Raintree Homeowners Association v. Club Corporation of America

NO. COA97-1238

NORTH CAROLINA COURT OF APPEALS

Filed: 1 September 1998

RAINTREE HOMEOWNERS ASSOCIATION, INC., a
non-profit corporation, and GEORGE B. MCDOWELL and spouse GAIL MCDOWELL I

·-….

Plaintiffs N

v. Mecklenburg County
No. 96 CVS 14686
No. 97 CVS 3364
RAINTREE COUNTRY CLUB, INC.I
and BELLSOUTH CAROLINAS
PCS, L.P.
Defendants

Appeal by defendants from orders filed 24 June 1997 by Judge Claude S. Sitton in Mecklenburg County Superior Court. Heard in the Court of Appeals 3 June 1998.

Weaver, Bennett & Bland, P.A., by Michael David Bland and Christopher M. Vann, for plaintiff-appellees.

Parker, Poe, Adams & Bernstein, L.L.P., by David N. Allen and Robert H. Tiller; and Brown McCarroll & Oaks Hartline, L.L.P., by Jackson D. Wilson II and J. David Apple, for defendant­ appellant Raintree Country Club, Inc.

Kilpatrick Stockton, L.L.P., by Jackson N. Steele, for defendant-appellant BellSouth Carolinas PCS, L.P.

MARTIN, Mark D., Judge.

Defendants Raintree Country Club (RCC) and BellSouth Carolinas PCS (BellSouth) appeal from orders of the trial court granting summary ejectment against RCC from property owned by plaintiff Raintree Homeowners Association (RHOA), and granting partial summary judgment against BellSouth and RCC declaring BellSouth to

be a trespasser on RHOA’s property due to construction of a. wireless communications tower on land leased by RCC from RHOA in violation of applicable zoning/ covenants, and lease provisions.
On 7 December 1970, the Mecklenburg County Board of Commissioners approved the creation of the Village of Raintree, a planned unit development (PUD). The zoning grant for the Raintree PUD required the formation of plaintiff RHOA1 a nonprofit property­ owners association. In 1975 a dispute arose between the developer of the Raintree PUD and certain individual Raintree property owners concerning the failure of developer to convey common areas in the PUD to RHOA as specified under the zoning grant.
On 22 May 19781 the trial court entered judgment approving a

settlement of the dispute. Pursuant to this judgment, developer’s successor conveyed the common areas in question to RHOA1 which then executed a lease-back of those properties comprising the golf and country club. On 30 November 1985 developer’s successor transferred and assigned all of its rights in the lease-back to defendant RCC.
On 27 February 1996, RCC entered into an option and sublease agreement with Gearon & Co., Inc., for approximately 2400 square feet of land. Gearon assigned its interest in the sublease agreement to defendant Bellsouth on 29 April 1996. In July 1996 Bellsouth began constructing a 150 foot wireless communications tower and concrete base on the property.
In October 1996 plaintiffs RHOA and George and Gail McDowell, property owners in the development, filed an action for declaratory

judgrnent against defendants (96 CVS 14686} alleging construction of the tower violated restrictive covenants governing the property, the PUD zoning ordinance for the Raintree development, and the lease between RHOA and RCC. In addition 1 in early February 1997, OA filed an action for summary ejectment in Mecklenburg County District Court (96 CVD 3364) against RCC for alleged default under the terms of the lease and for holding over after the lease was
terminated.

On 17 March 1997, by consent order, the summary ejectment action was consolidated with an earlier case involving RHOA and RCC (92 CVS 11282), in which RHOA sought to terminate the lease on other grounds.
Plaintiffs, on 5 May 1997, filed a motion for partial summary judgment in their declaratory judgment action. At the 16 May 1997 hearing, the trial court orally granted a motion to consolidate the declaratory judgment action with the previously consolidated actions.
On 24 June 1997, the trial court granted plaintiffs’ motion for partial summary judgment, holding that construction of the tower violated the restrictive covenants, the PUD zoning ordinance, and RCC’s lease, and declared BellSouth to be a trespasser on RHOA’s property. The court dismissed plaintiffs’ remaining declaratory judgment claims pursuant to N.C.R. Civ. P. 12(b} (6), or in the alternative, N.C.R. Civ. P. 56. In addition, the trial court entered judgment for RHOA in its summary ejectment action, ordering that RCC be ejected from the premises. Defendants appeal.

At the outset we note “[o]rdinarily, an appeal from an interlocutory order will be dismissed as fragmentary and premature unless the order affects some substantial right and will work injury to appellant if not corrected before appeal from final ‘judgment.” Stanback v. Stanback, 287 N.C. 448, 453, 215 S.E.2d 30,
34 (1975). In the present action, RCC has been ordered to forfeit its leasehold interest in the country club property, and BellSouth faces the loss of its communications tower and loss of revenue. Accordingly, this appeal is proper. Cf. Investments v. Housing, 292 N.C. 93, 99, 232 S.E.2d 667, 671-672 (1977) (money judgment
affected substantial right of judgment debtor); English v. Realty

Corp., 41 N.C. App. 1, 10, 254 S.E.2d 223, 231 (1979) (partial

summary judgment including mandatory injunction directing defendant to remove roadway affected substantial right) .
The standard of review for summary judgment is “whether there

is any genuine issue of material fact and whether the movant is entitled to judgment as a matter of law.” Beam v. Kerlee, 120 N.C. App. 203, 208, 461 S.E.2d 911, 916 (1995), disc. review denied, 342
N.C. 651, 467 S.E.2d 703 {1996). The standard of review for summary ejectment is whether the judgment is supported by the findings of fact and conclusions of law. Cla-Mar Management v. Harris, 76 N.C. App. 300, 301, 332 S.E.2d 495, 495 (1985). In
addition, RCC did not assign error to any of the trial court’s findings of fact. The trial court’s findings are therefore presumed to be supported by competent evidence and are binding on appeal, and our scope of review is confined to whether these

findings support the trial court’s conclusions of law. First Union National Bank v. Bob Dunn Ford, Inc., 118 N.C. App. 444, 446, 455
S.E.2d 453, 454 (1995).

I.

RCC contends the trial court “erred in ignoring crucial provisions of the parties’ lease, which grants RCC the right to conduct any lawful activity and to enter into subleases.”
The lease-b.:..ck agreerr.cnt specified, in pertinent part:

4. . The Leased Premises shall be used and maintained by Tenant, its successors, assigns and licensees, as a golf and countzy club, subject to the terms of the SETTLEMENT
AGREEMENT of which this CONTRAcr OF LEASE-BACK is a part.

Subject to Tenant’ s agreements stated above concerning the maintenance and use of the Leased Premises as a golf and countzy club, the Leased Premises may be used for any lawful
purpose, subject, however, to the following:
(a) Nuisances and Hazards. Tenant shall
not permit the use of the Leased Premises
in any manner which shall be unlawful or
constitute a public nuisance or a hazard.
(b) Governmental Regulations. Tenant shall
comply with all applicable laws, ordinances,
orders and regulations prescribed by lawful
authority relating to the Leased Premises,
including (but not limited to) those
concerning cleanliness, safety, occupancy
and use of the Leased Premises ….

18. Assignment. . . Tenant shall have the absolute right at any time and from time to time, so long as it shall not be in default hereunder, to assign its rights and obligations under this lease agreement to any other person, firm or corporation and shall further have the right to enter into subleases, license agreements and concession agreements with any other person, firm or corporation.

(emphasis added) .

The rules governing interpretation of a lease are the same as those governing interpretation of a contract. Martin v. Ray Lackey Enter.prises, 100 N.C. App. 349, 354, 396 S.E.2d 327, 330 (1990).
When the language of a contract is plain and unambiguous, eonstruction of the language is a matter of law for the court. Sales Co. v. Plywood Distributors, 13 N.C. App. 429, 430, 185 S.E.2d 737, 738 (1972}. “An ambiguity exists where, in the opinion of the court, the language of the policy is fairly and reasonably susceptible to either of the constructions asserted by the parties.” Maddox v. Insurance Co., 303 N.C. 648, 650, 280 S.E.2d
9071 908 (1981)•

RCC contends that the above language in the lease gave them the right to sublease with any other person, firm or corporation for any lawful purpose. We do not read the lease as granting such broad authority. Under this interpretation, RCC would be free to sublet a portion of the property for any lawful purpose, regardless of its relation to the golf and country club, so long as the golf and country club continued to exist on the remaining property. Instead/ the only reasonable interpretation of the “lawful purpose” language requires us to construe it in conjunction with the “golf and country club” language; i.e., RCC is entitled to sublet portions of the property, provided the lawful purpose of the sublease is related to the use and maintenance of the golf and country club.
BellSouth points to additional language in the lease giving

the tenant the “absolute right during the term of this lease and

all renewals to do all things necessary or convenient to maintain or improve the Leased premises,” as support for the broader interpretation advanced by RCC. Our analysis of this portion of the lease, how ver, leads us to conclude the contrary:
6. Maintenance and Alterations. . ..Tenant shall have the absolute right during the term of this lease and all renewals to do all things necessary or convenient to maintain or improve the Leased Premises including, without limitation, making such modifications, additions, or subtractions to or with respect to the clubhouse and related facilities, changing the grade of the land {even to the extent of changing surface water flow), cutting or planting timber, creating or destroying ponds or lakes, adding additional or moving or modifying existing greens, tees, traps, fairways or roughs, and constructing maintenance sheds, shelters, or other buildings or structures convenient or necessary to the use and operation of the club facilities and golf course, including modification of and removal of existing buildings or structures. Tenant shall have the obligation to maintain and keep in repair the golf course and improvements in order that the course may be playable year-round, subject to reasonable “changeover” periods and closings due to factors common to the maintenance of golf courses in this area.

The context of this paragraph concerns the maintenance of a golf and country club. Indeed, the purpose of the lease-back agreement was to provide for the golf and country club. To construe “any lawful purpose” in isolation is to ignore the purpose of the lease- back and is contrary to reasonable interpretation. Our view is further supported by the settlement agreement itself:
5. . Maintenance of Properties. The [RHOA] agrees to maintain the following areas:
(a) All common areas not maintained as golf course areas, and owned by the [RHOA] and all such areas owned by other homeowners

associations for which the [RHOA] has contractual responsibility for maintenance.
(b) All lakes or portions of lakes within the Raintree Planned Unit Development . which are outside of the area constituting golf course or clubhouse area and leased for such purposes.
(c) All woods and flood plains within the Raintree PUD which are outside of the area constituting golf course or clubhouse area and leased for such purposes. . . .

(emphasis added). Accordingly, the trial court correctly concluded

\\[t]hat construction of a wireless communications tower on. dedicated common area in the Raintree Planned Unit Development by Defendant BellSouth . violates the lease-back between Plaintiff [RHOA] and Defendant [RCC],” and summary judgment was properly granted.
Because we conclude summary judgment was correct on the lease- back violation, we do not reach defendants’ arguments concerning the restrictive covenants or PUD zoning ordinance.
II.

RCC also contends the trial court erred in granting summary ejectment without affording RCC a reasonable opportunity to cure.
ThP. lease-back provided that an “event of default” included:

Tenant’s failure, within sixty (60} days after receipt of demand from Landlord, to fulfill any obligation or to cure any default in the performance of any condition or term imposed on Tenant by this lease or, if fulfillment of the obligation or curing shall reasonably require more than sixty (60) days, Tenant’s failure within such 60-day period to commence fulfillment of the obligation or curing of the default and thereafter to pursue the same with diligence ….

Upon the happening of any “event of default,” Tenant . . . shall be notified of such default

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and Landlord shall remedies:

have the following

(iii) Landlord may terminate the interest of Tenant hereunder, but not until Citibank has had 60 days notice of such default and has been afforded reasonable opportunity to cure such default.

BellSouth began constructing its tower in late July 1996. Evidence was presented that on 31 July 1996, RHOA, by certified mail, notified RCC that the construction of the tower violated its lease with RHOA. The letter indicated RCC was in violation of the lease because the construction of the tower was not related to the operations of a golf course and country club, and gave RCC an opportunity to cure the violation. BellSouth, by certified letter, was notified it was trespassing. On 8 August 1996, RCC responded with a letter denying any violation and refusing to cure any alleged defects. RHOA subsequently notified Citibank, and after an additional 60-day period elapsed without RCC or Citibank curing the default, RHOA, on 27 January 1997, notified all parties of lease termination.
Defendants had ample notice and opportunity to cure the lease

violation. Accordingly, the trial court’s grant of summary ejectment is affirmed.
We have reviewed defendants, remaining assignments of error

and find them to be without merit.

Affirmed.

Judges GREENE and TIMMONS-GOODSON concur. Report per Rule 30(e).