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Lake Shawnee Club, Inc. v. Akhtar

March 14, 2008

LAKE SHAWNEE CLUB, INC., PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
v.
MUHAMMAD AKHTAR, ARCHIBALD CLARK, GUY DEWEY, MELISSA MILLER AND DAVID CASCONE, AND SALVATORE PASCHITTI, DEFENDANTS-RESPONDENTS/CROSS-APPELLANTS, AND GEORGE CAMERON, CARL CEBRICK, GLEN CENTI, ANDREW & SUSAN CHAPPEL, SHAWN & TARA FOLEY, RALPH & IDA FORINI, MARY GUADALUPE, ROGER & SANDRA HANSRAJ, VERONICA HELLNER, STEVEN HORVATH, MRS. CHARLES KNEIPHER, STEVEN LEWIS, RALPH LONG, MANDY MANZINI, JAMES MASON, LINDA OTTALY, GLEN PARKER, CAROL ROSENSKI, SUE THOMPSON, RICHARD & DIANE WALKER, DEFENDANTS.



On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Morris County, Docket No. DC-008878-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 5, 2008

Before Judges Fuentes, Grall and Chambers.

Plaintiff Lake Shawnee Club, Inc. (the Club) is a not-for-profit corporation organized under the laws of this State. Membership in the Club is limited to owners of property in an area of Jefferson Township, Morris County, known as the Lake Shawnee Reservation (the Reservation). The individual defendants each own at least one residential lot in the Reservation, but none have opted to join the Club.

The Club commenced this litigation to recover an amount invoiced as "membership dues" for the fiscal year beginning on April 1, 2006. In each complaint the Club alleged alternate theories in support of its claim for payment of the sum billed: on a book account; for goods and services rendered; as the reasonable value of goods and services sold and delivered or rendered; and as a debt on an account. Defendants responded with a demand for the Club to withdraw its frivolous claims and filed counterclaims for a judgment declaring that the Club could not require all owners of property in the Reservation to become members of the Club or pay dues. Initially, all owners of property in the Reservation were members of the Club, but during a period starting in the 1960s and extending to 2006, the Club treated membership as optional.

After consolidating the actions, the trial judge granted defendants' motion for summary judgment and declared that the Club lacked authority to require homeowners in the Reservation to join the Club or pay "membership fees." The judge entered a supplemental order that enjoined the Club from prosecuting litigation to recover "membership fees" pending in other vicinages, terminated that pending litigation and enjoined the Club from "initiating any action for the collection of mandatory membership fees from any property owner in the Lake Shawnee section of Jefferson Township in the future." The judge denied defendants' request for counsel fees pursuant to Rule 1:4-8 and N.J.S.A. 2A:15-59.1. A motion for reconsideration was denied.

The Club appeals from the summary judgment dismissing its complaints and declaring that membership in the Club is not mandatory and from the supplemental order terminating litigation pending in other vicinages and precluding future litigation. Defendants cross-appeal from the denial of counsel fees.

The question before this court is narrow. The trial judge assumed that the developer conveyed the property by a master deed that is in each defendants' chain of title. The trial judge also assumed that the Club could enforce any covenants and conditions in the master deed and recorded documents that made membership and dues mandatory, despite the period of non-enforcement. The judge granted summary judgment in favor of defendants on the ground that "[t]here is no contract, no deed restriction, and no other principle of law or equity [that] requires" membership in the Club and payment of Club membership fees. Accordingly, the only question on this appeal is whether the provisions of the master deed and recorded documents referenced therein require each owner of property in the Reservation to become a member of the Club. On review of this grant of declaratory judgment by summary judgment in favor of defendants, we must determine whether defendants were entitled to judgment as a matter of law on the narrow issue, the undisputed facts and the facts assumed to be favorable to the Club. R. 4:46-2(c); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995); Kramer v. Ceiba-Geigy Corp., 371 N.J. Super. 580, 602 (App. Div. 2004). Because a proper reading of the documents that are assumed to be in defendants' respective chains of title make membership mandatory, we reverse and remand for further proceedings and affirm the order denying counsel fees.

The pertinent facts are not in dispute. The Reservation includes over 500 residential lots, a private lake, which was formed by a dam built in the 1940s, and recreational areas. The Club maintains the dam, a clubhouse, beaches, swimming lanes, boat docks, playing fields, parks and basketball courts. The Club also purchases liability insurance. The New Jersey Department of Environmental Protection has determined that the dam poses a "significant hazard." The dam needs repair. In addition, the Club has concluded that the lake is in need of dredging that will cost over one-million dollars.

The Arthur D. Crane Company (Crane) developed the Reservation in the mid-1940s. In 1946 the Club incorporated and filed a certificate of incorporation. The Club initially rented the lake and recreational areas from Crane pursuant to an Agreement and Lease of August 6, 1948, which was recorded in the Book of Deeds for Morris County.*fn1 On September 28, 1948, Crane conveyed lots in the Reservation to the Schneiders. For purposes of this summary judgment motion, the Schneider deed was assumed to be in each of the defendants' chain of title.*fn2

The Schneider deed refers to the Club's certificate of incorporation, charter and the recorded Agreement and Lease between the Club and Crane. With reference to the location of the Agreement and Lease in the book of records, Section I of the Schneider deed makes the conveyance subject to that Agreement and Lease. Section IV of the deed requires members of the Club to comply with the Club's certificate of incorporation, charter and by-laws.

The Club's certificate of incorporation recognizes the Club's obligation to enforce conditions and restrictions in the deed and explains Club membership. The certificate identifies its purposes in a list that includes the development of "social and recreational activities," maintenance of Club properties, and enforcement of the "covenants, conditions, and restrictions under which the properties in the Reservation" were sold.

The certificate of incorporation provides for two classes of Club members. "Associate members" are the "immediate family" of an active member. "Active members" are "the incorporators" of the Club, "those who acquire ownership of the property in" the Reservation, and "those who contract to purchase property in the [Reservation], and are elected to membership in [the Club] and are in good standing." Thus, the certificate of incorporation makes those who ...


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