Assigned on Briefs December 2, 2016
from the Chancery Court for Shelby County No. CH-14-0268 Jim
Kyle, Chancellor No. W2016-00721-COA-R3-CV
appeal involves the interpretation of a declaration of
covenants for a homeowners' association. Appellant, the
homeowners' association, filed liens on lots owned by
Appellee for nonpayment of association fees. Appellee brought
suit to quiet title and for damages for slander of title. The
trial court dismissed the slander of title claim and
interpreted the declaration of covenants to exempt Appellee
from the payment of association fees. The trial court removed
the liens filed against Appellee's lots, but assessed no
monetary damages against Appellant. Appellant appeals.
Discerning no error, we affirm.
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
Court Affirmed and Remanded
Baskind, Robin H. Rasmussen, and Megan Black Ross, Memphis,
Tennessee, for the appellant, Greystone Homeowners
Clayton Culpepper, III, Memphis, Tennessee, for the appellee,
Moore & Associates, Memphis, LLC.
Armstrong, J., delivered the opinion of the court, in which
Andy D. Bennett and Thomas R. Frierson, II, JJ., joined.
December of 2010, Moore & Associates, Memphis, LLC
("Appellee" or "Moore") purchased from
the developer, Greystone General Partnership, twenty-seven
lots in a gated, residential community near Memphis,
Tennessee. Charles Moore is the managing member of Moore.
Greystone Homeowners Association, Inc. ("Appellant"
or "Greystone Association") is the homeowners'
association for the Greystone residential development. Moore
received title to the lots by warranty deed in lieu of
foreclosure because the developer was facing bankruptcy and
foreclosure by SunTrust Bank. Moore purportedly purchased the
lots with the intention of building homes on the lots to sell
to third parties.
part of Greystone residential community, Moore's lots are
subject to the "Declaration of Covenants, Conditions and
Restrictions for Greystone, P.D." ("CCR"),
which was drafted by one of the general partners and executed
on July 16, 2001. The CCR provides that each lot owner
becomes a member of the Greystone Association, and, as a
member, each lot owner must pay assessments to Greystone
Association, including regular assessments, special
assessments, and emergency assessments. Article IX, section I
of the CCR exempts two types of entities from paying the
The Developer-Declarant shall not be required to pay
assessments on any lot owned by it. Any third party
purchasing a lot from Developer-Declarant for the purpose of
constructing a single-family residence for sale to the
general public shall not be required to pay assessments so
long as said third party does not occupy the property.
following its purchase of the lots, Moore paid $25, 000.00 to
Greystone Association. Charles Moore described this payment
as a "goodwill gift, " but denied that the $25,
000.00 was paid as assessment fees.
furtherance of its plan to build homes on the lots before
selling them, in July of 2013, Moore contracted with Cade
Peeper, a licensed contractor, to build a single-family
residence on one of its lots. The home was completed by the
builder. For reasons it attributed to Greystone Association,
Moore did not build additional homes in the Greystone
development. Moore did sell two unimproved lots in June 2012
and April 2013, respectively.
January 31, 2014, Appellant filed liens on the remaining lots
owned by Moore. The liens, which totaled $128, 100.00, were
for alleged assessment arrears. On February 21, 2014, Moore
filed an action in the Shelby County Chancery Court
("trial court"), seeking a declaratory judgment to
quiet title relative to the liens filed by Appellant and
seeking damages for slander of title. In its complaint, Moore
averred that it was exempt, under the CCR, from paying
assessments. Specifically, Moore argued that, pursuant to
article IX, section 1 (supra), it was a third-party
that had purchased lots from the developer with the purpose
of constructing single-family residences for sale to the
April 4, 2014, Appellant answered the complaint, alleging
that Moore did not qualify for an assessment exemption under
the CCR and, therefore, Appellant was entitled to collect the
assessment arrearage. Appellant also filed a counterclaim
against Moore, asserting claims for breach of contract and
unjust enrichment for Moore's failure to pay
homeowners' association fees. On April 11, 2014, Moore
answered the counterclaim, denying Appellant's
October 24, 2014, Moore filed a motion for summary judgment,
reiterating its argument that it is exempt from paying
association fees under the plain language of the CCR. On
February 27, 2015, Appellant filed its response to
Moore's motion for summary judgment, contending that
Moore does not qualify for an exemption under the CCR.
Specifically, Appellant argued that because Moore is not the
developer or assignee of the developer and did not purchase
the lots for the purpose of constructing homes on the lots
for sale, Moore is not exempt from payment of association
fees. As support for its position, Appellant cited Mr.
Moore's deposition testimony, in which he stated that
Moore is not a contractor and may not itself legally
construct homes on the lots for sale to the public. Appellant
also noted that Moore's real estate advertisement for its
lots listed twenty-five unimproved lots for sale. The trial
court denied Moore's motion for summary judgment by order
dated April 24, 2015.
March 8 and 9, 2016, the trial court heard the case. In its
judgment, filed on March 22, 2016, the ...