Stillwater Lakes Civic Assoc., Inc. & Stillwater Sewer Corp. v. G. Kuzni

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Stillwater Lakes Civic Association, Inc. :

and Stillwater Sewer Corporation :

:

v. : No. 998 C.D. 2018

: Argued: December 12, 2019

George Kuzni, :

Appellant :

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE P. KEVIN BROBSON, Judge

HONORABLE ANNE E. COVEY, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION

BY JUDGE BROBSON FILED: February 5, 2020

George Kuzni (Owner) seeks review of two orders of the Court of

Common Pleas of Monroe County (trial court). Both orders arise from an action by

the Stillwater Lakes Civic Association, Inc. (Association) and the Stillwater Sewer

Corporation (collectively, Appellees), seeking to collect unpaid dues, assessments,

and sewer fees, as well as attorney’s fees, from Owner. The first order, dated

March 13, 2017, granted summary judgment in favor of Appellees as to the issue of

liability, and the second order, dated June 6, 2018, awarded damages to Appellees

in the amount of $43,377.39. For the following reasons, we reverse and remand.

I. BACKGROUND

This matter concerns Owner’s properties at 2346 and 2347 Nadine

Boulevard, Coolbaugh Township, Pennsylvania (the Properties), within the housing

development known as Stillwater Lake Estates (the community). Sun Dance

Stillwater Corporation (Developer) began development of the community

in 1968 and sold the first residential lots in 1971. In 1981, Developer conveyed to

the Association, a Pennsylvania nonprofit corporation, all roads and certain

recreational facilities (including two lakes, a beach, a clubhouse, a pool, and other

facilities) within the community. In 1986, Developer conveyed either title to or an

easement in the sewer facilities in the community to Stillwater Lakes Sewer

Corporation, a wholly owned subsidiary of the Association.

Owner purchased the first of the Properties—lot 2346, on which he

maintains a residence—in 2004, and the adjoining lot 2347 in 2006. Lot 2347

contains wetlands and remains vacant. The deeds by which Owner took title to the

Properties provide that the conveyances are “subject to covenants, conditions, and

restrictions which shall run with the land as appear in the chain of title.”

(Reproduced Record (R.R.) at 71a, 75a, 77a.) Prior deeds for both of the Properties

impose identical sets of covenants and restrictions that will run with the land

(collectively, the deed covenants), including the following:

2. The purchase and ownership of subject lot does

not convey or confer upon the PURCHASER any right,

title or interest in and to the lake or lakes, stream or

streams, swimming pools, or pools, community facility

buildings, club house, ski-runs and other types of

community facilities and improvements, whether for

recreational use or not or any right, title or interest for

PURCHASER to use, occupy and enjoy said facilities,

improvements, lake or lakes, stream or streams, swimming

pool or pools, club house, ski-runs, etc., except that

PURCHASER has the right to join SELLER’s club when

same is formed and use aforesaid facilities, and until same

is formed has the right to use the aforesaid facilities,

provided that PURCHASER pays SELLER all recreation

and road maintenance charges when due and complies

2

with all rules and regulations of club when formed

[(covenant 2)].

3. PURCHASER agrees to pay to SELLER each

and every year a road maintenance and use charge for the

maintenance and use of the roads traversing the

development, and a recreation charge for maintenance and

use of recreational facilities, in such amount as the

SELLER in its sole and absolute discretion is to be paid.

In any event, the minimum yearly road maintenance and

use charge to be paid by PURCHASER shall be $20.00

[(covenant 3)].

....

19. The portion of the lands of the SELLER laid

down on the map as streets are [sic] not dedicated to public

use and title thereto shall remain in the SELLER subject

to the right to convey to another entity with reservations

and subject to the right of the PURCHASER and those

claiming under them to use the same for ingress and egress

. . . [(covenant 19)].

20. If the rear lot lines of lake and stream lots . . .

do not abut upon the physical stream or lake, then in such

case, an easement, for ingress and egress to the lake and

stream as the case may be is hereby granted by SELLER

to such lot owner commencing from the rear line of subject

lot, for the length of such rear line, to the stream or lake

[(covenant 20)].

(Id. at 103a, 118a.) A prior deed for Lot 2347 makes that lot subject to the

Declaration of Covenants, Conditions, and Restrictions of Stillwater Lake Estates,

recorded in Monroe County in deed book volume 1121, page 213 (the Declaration).1

The provisions of the Declaration are substantially similar to the deed covenants.

(See Original Record (O.R.), Item No. 52, App. F.)

1

The Declaration does not independently apply to the Properties because they are not part

of the property described in the Declaration. Accordingly, the Declaration applies to Lot 2347 but

not to Lot 2346.

3

Shortly after purchasing the first of the Properties, Owner began

receiving and paying invoices from the Association. For several years, Owner

continued to pay in full all invoices from the Association with respect to both

Properties. In 2009 or 2010, Owner wrote a letter to the managing director of NEPA

Associates, which then managed the community on behalf of the Association,

purporting to terminate any membership interest he had in the Association (the

termination letter). Either upon or shortly after the termination letter, Owner ceased

paying all invoices from the Association with respect to both Properties.

In 2013, Owner’s attorney wrote a letter to the Association concerning

several citations the Association had issued to Owner for maintaining an “unsightly

lot.” (Supplemental Reproduced Record (S.R.R.) at 55b.) In the letter, Owner’s

attorney reiterated that Owner is not a member of the Association. Counsel for the

Association responded with a letter stating that “[the Properties are] certainly located

within the boundaries of the [Association]” and that, accordingly, Owner is a

member of the Association and responsible for assessments for maintenance. (Id.

at 41b.)

On December 2, 2015, Appellees filed an action in the trial court,

seeking to collect “dues, assessments, sewer charges and various other charges,” plus

late fees, interest, and attorney’s fees from Owner for the period during which Owner

did not pay Association invoices (approximately 2011 to the present). (R.R. at 3a.)

Appellees claimed that, by virtue of his ownership of lots within the community,

Owner must be a member of the Association and is subject to the Association’s

bylaws (Bylaws), which authorize the Association to impose assessments upon

members for maintenance of common elements.

4

In anticipation of trial, Appellees secured Owner’s deposition. Owner

admitted that, during the entire period of his ownership of the Properties, he has

driven on roads owned and maintained by the Association in order to access the

Properties. Owner also testified that he paid the Association’s invoices for

assessments in full before 2011, without inquiring about the basis for the charges.

He explained that, following the termination letter, he asked the Association to give

him a separate accounting of road and sewer maintenance assessments, which he

would pay, but excluding “membership dues,” which he refused to pay. (S.R.R.

at 44b.) After the Association refused to make an itemized accounting and

demanded payment in full (and following an alleged mismanagement of one of

Owner’s previous payments), Owner made no further payments to the Association.

Owner also stated that he has gone boating on the lake adjoining his

Properties “more than 30 times” and allowed guests to fish in the lake, including

instances of boating and fishing as recently as 2014. (Id. at 29b-30b.) He testified

that he has never used other Association-owned amenities such as the clubhouse,

pool, basketball courts, and beach, but he confirmed that no one has sought to

prevent him from doing so. He stated that he has attended “a couple” meetings of

the Association, including one in an attempt to address the Association’s board

concerning the community’s sewer system. (Id. at 34b.) Owner stated that the board

did not permit him to speak and instructed the members present to “just ignore” him.

(Id. at 36b.) Owner confirmed that, although he did not attempt to vote at the

meeting, no one prevented him from doing so.

On March 13, 2017, the trial court granted summary judgment in favor

of Appellees, concluding that Owner is obligated to pay the invoiced costs. The trial

court reasoned that covenants in Owner’s chain of title require him to become and

5

remain a member of the Association and, thus, subject him to assessments. The trial

court also stated, without elaboration, that Owner admitted he is a member of the

Association2 and that the Bylaws prohibit termination of membership. For these

reasons, the trial court concluded that the Association is authorized to collect the

assessments it seeks under Section 5302(a) of the Uniform Planned Community Act

(Act), 68 Pa. C.S. § 5302(a). After granting summary judgment on the issue of

liability and holding a damages hearing, the trial court awarded Appellees damages

in the amount of $43,377.39.

II. ISSUES

On appeal,3 Owner argues that the trial court erred in granting summary

judgment. Specifically, Owner asserts that genuine issues of material fact exist with

respect to: (1) whether, under the Act and in light of the deed covenants, the

community qualifies as a planned community and the Association qualifies as a unit

owners’ association authorized to impose assessments on Owner; (2) whether Owner

is a member of, and thus subject to, the Association; (3) whether the Properties are

located in a community distinct from the community governed by the Bylaws; and

(4) whether the Declaration conflicts with the Bylaws, such that the trial court erred

in failing to apply Section 5203(c) of the Act to resolve such a conflict. Owner

further argues that, because the trial court erroneously granted summary judgment,

we must reverse its later order awarding damages.

2

We find no such admission in the record.

3

“An order of a trial court granting summary judgment may be disturbed by an appellate

court only if the court committed an error of law . . . .” LJL Transp., Inc. v. Pilot Air Freight

Corp., 962 A.2d 639, 647 (Pa. 2009). In reviewing a grant of summary judgment, we exercise de

novo review that is plenary in scope. Id.

6

Before addressing Owner’s arguments, we note that Owner “admits to

using the roads within the [community], and is prepared to pay for his proportional

share of sewer charges and for reasonable charges for maintenance of roads.” (Br.

for Appellant at 8.) Accordingly, Owner disputes only his liability for the invoiced

costs associated with the common elements of the community other than the

roadways and sewer system.

III. DISCUSSION

The Pennsylvania Rules of Civil Procedure permit summary judgment

“whenever there is no genuine issue of any material fact . . . which could be

established by additional discovery or expert report.” Pa. R.C.P. No. 1035.2. Thus,

Pennsylvania courts may grant summary judgment only “on an evidentiary record

that entitles the moving party to a judgment as a matter of law.” Toy v. Metro. Life

Ins. Co., 928 A.2d 186, 194-95 (Pa. 2007). “In considering the merits of a motion

for summary judgment, a court views the record in the light most favorable to the

non[]moving party, and all doubts . . . must be resolved against the moving party.”

Id. at 195. Thus, summary judgment is appropriate only where the right to such a

judgment is clear and free from doubt. Id. Because the existence of a genuine issue

of material fact is a question of law subject to our de novo review, we do not defer

to the trial court’s assessment of that question. Yenchi v. Ameriprise Fin., Inc.,

161 A.3d 811, 818 (Pa. 2017). Instead, we apply on appeal the same summary

judgment standard applicable in the trial court. See Gior G.P., Inc. v. Waterfront

Square Reef, LLC, 202 A.3d 845, 852 n.10 (Pa. Cmwlth.), appeal denied,

217 A.3d 1216 (Pa. 2019).

7

A. Obligation by Virtue of Ownership

Owner first argues that there exists a genuine issue of material fact

regarding whether the deed covenants require him to be a member of the Association

or otherwise require payment for recreational facilities. He points out that the deed

covenants permit voluntary membership in a “club” and do not give notice of any

mandatory unit owners’ association. He also emphasizes that the deed covenants

require payments “to SELLER,” i.e., Developer, not to the Association. He claims

that resolving these and other ambiguities in the deed covenants requires factual

determinations regarding the intended meaning of the deed covenants.

In response, Appellees argue that Owner waived the issue of ambiguity

in the deed covenants by failing to assert it explicitly in his Pa. R.A.P. 1925(b)

statement.4 In the alternative, Appellees assert that the community is a “planned

community” under the Act,5 that assessments are compulsory, and that the deed

covenants unambiguously require maintenance payments for recreational facilities,

at first to Developer and then to the Association as Developer’s successor.

1. Construction of Deed Covenants

Generally, the interpretation of a deed—including restrictive covenants

contained in a deed—is a question of law for the court. Starling v. Lake Meade Prop.

Owners Ass’n, Inc., 162 A.3d 327, 340 (Pa. 2017). “The same principles that apply

to the interpretation of a contract apply to the interpretation of a deed.” Id. at 341.

4

We find Appellees’ waiver argument unpersuasive. Owner raised in his Rule 1925(b)

statement the issue of “outstanding disputes as to relevant facts,” which includes as a subsidiary

issue factual issues regarding the meaning of the deed covenants. (R.R. at 637a);

see Pa. R.A.P. 1925(b)(4)(v) (“Each error identified in the [Rule 1925(b) s]tatement will be

deemed to include every subsidiary issue . . . which was raised in the trial court.”). Owner raised

exactly this issue before the trial court. (See O.R., Item No. 30 at 6.)

5

68 Pa. C.S. §§ 5101-5414.

8

Accordingly, the object of our interpretation is to ascertain and effectuate the

intention of the parties, viewing the language of the instrument in its entirety. In re

Conveyance of Land Belonging to City of DuBois, 335 A.2d 352, 357 (Pa. 1975);

Wilkes-Barre Twp. Sch. Dist. v. Corgan, 170 A.2d 97, 98 (Pa. 1961) (“[The parties’]

intention is to be gathered from a reading of the entire contract.”). Where the

language of the restrictive covenant is clear, “the intent of the parties should be

gained from the writing itself.” Hankin v. Goodman, 246 A.2d 658, 660 n.1

(Pa. 1968).

If, however, the language of the instrument leaves doubt about the

intended meaning of a covenant, “the court must look at the circumstances under

which the grant was made” in order to determine what the parties intended. In re

Estate of Quick, 905 A.2d 471, 474-75 (Pa. 2006) (quoting Hindman v. Farren,

44 A.2d 241, 242 (Pa. 1945)). The court may consider circumstances such as “the

situation of the parties, the objects they apparently ha[d] in view, and the nature of

the subject [] matter of the agreement.” Id. Although the existence of an ambiguity

is a legal determination for the court to make, “the resolution of conflicting . . .

evidence relevant to what the parties intended by the ambiguous provision is for the

trier of fact.” Hutchison v. Sunbeam Coal Corp., 519 A.2d 385, 390 (Pa. 1986).

Turning to the instant matter, covenant 2 clearly provides that the

conveyance of the Properties does not grant the right to use the recreational facilities

enumerated in covenant 2 (including the lake, pools, community buildings, and

clubhouse). Instead, covenant 2 allows use of those facilities only if an owner

voluntarily exercises his “right” (importantly, not his “obligation”) to join the

9

Association and becomes subject to the Association’s rules and regulations. 6 Thus,

covenant 2 implicitly creates two categories of property owners—those who are

members of the Association and those who are not. For owners who do not elect to

join the Association pursuant to covenant 2 (nonmember owners), the deed

covenants convey no right to use the listed recreational facilities.7 Importantly,

covenant 2 clearly provides that joining the Association (and acquiring the

concomitant right to use the listed recreational facilities) is optional.

The language of covenant 3 is equally clear. It requires all owners to

make two types of payments to Developer (and, by implication, its successors8) in

perpetuity: (1) a payment “for the maintenance and use of the roads traversing the

[community],” and (2) a payment “for maintenance and use of recreational

facilities.” (R.R. at 103a (emphasis added).) With respect to roads, the perpetual

6

Although covenant 2 gives owners the right to join “SELLER’s club,” this apparently

refers to the Association, as Appellees concede. This view comports with the Declaration’s

version of covenant 2, which states that “GRANTEE has the right to join the aforesaid

ASSOCIATION and use aforesaid facilities.” (O.R., Item No. 52, App. F.)

7

That analysis applies to owners who took title after the Association was formed. For

owners who took title before the Association existed, covenant 2 provides a provisional right to

use the recreational facilities subject to certain conditions, including maintenance payments to

Developer. Although the deed covenants appear to have been drafted at some time before creation

of the Association, the initial conveyances of the Properties by Developer did not occur until 1982

and 1983—at least one year after the Association was formed. Because no owners of the Properties

could have benefitted from the provisional use right, that portion of covenant 2 is not relevant to

our analysis.

8

The deed covenants “shall run with the land.” (R.R. at 102a, 107a.) Here, Developer

ultimately conveyed the roads and recreational facilities to the Association, which now enjoys the

right to benefit from the covenants benefiting those respective parcels, including covenant 3. See

Goldberg v. Nicola, 178 A. 809, 810 (Pa. 1935) (holding that grantor of covenant-benefitted

property “transferred to his grantee the same right in the covenant that he possessed, with the same

obligation imposed”). Moreover, the Declaration—recorded after Developer conveyed the roads

and recreational facilities to the Association—requires that the covenant 3 payments be made to

“the . . . Association.” (O.R., Item No. 52, App. F.)

10

maintenance and use fee is consistent with covenant 19, which gives all owners

(including nonmembers) the unqualified right to use the roads in the community.

Covenants 2 and 3, however, appear to contradict one another regarding

recreational facilities. On one hand, covenant 3 requires all owners (including

nonmembers) to pay a fee for, inter alia, “use of” the recreational facilities. On the

other hand, covenant 2 allows owners to join the Association, thereby giving them

the right to use the recreational facilities, whereas nonmembers have no such right.

Thus, covenant 3 applies the recreational facility use fee to all owners, while

covenant 2 limits use to members. In other words, covenant 3 appears to impose a

use fee on some owners who, by virtue of their nonmembership, have no right to use

the recreational facilities. Thus, the deed covenants appear to conflict. It borders on

nonsense to construe the deed covenants as requiring nonmember owners to pay a

use fee for recreational facilities which they cannot use.

Thus, reading covenants 2 and 3 together, we are hard pressed to

conjecture a “reasonable construction . . . that will accord with the intention of the

parties.” Hindman, 44 A.2d at 242 (quoting Connery v. Brooke, 73 Pa. 80, 83

(1873)). We cannot ascertain from the contradictory instrument what the parties

intended. Perhaps Developer intended to obligate all owners, including

nonmembers, to pay for maintenance of the recreational facilities, reasoning that

those facilities benefit even owners who do not use them by increasing property

values and enhancing the aesthetic appeal of the community. But that construction

ignores covenant 3’s clear language tying the payment covenant to maintenance and

use (and, thus, to voluntary membership). Alternatively, Developer might have

intended that, upon creation of the Association, only members of the Association

would pay for maintenance and use of the recreational facilities. But this view

11

ignores the recreational maintenance and use fee in covenant 3, which even

nonmember owners have clearly covenanted to pay in perpetuity.9

Neither the parties’ briefs nor a review of the record reveals any basis

upon which we could choose between these competing constructions. For example,

the Declaration retains virtually identical language, except that it removes the

provisional right to use the recreational facilities. Moreover, neither of the potential

constructions is so inequitable, unusual, or one-sided that we would, as a matter of

law, eliminate it as a possibility and adopt another. Cf. New Charter Coal Co. v.

McKee, 191 A.2d 830, 834-35 (Pa. 1963) (discussing and applying doctrine that

given one unreasonable construction and another equitable, reasonable construction,

the latter will be adopted). Extrinsic evidence is, therefore, required to determine

the proper construction of the deed covenants with respect to the nonmember

owners’ obligation to pay assessments for recreational facilities. The review,

credibility, and resolution of conflicts within that evidence are matters for the

factfinder rather than matters of law. Hutchison, 519 A.2d at 390. Accordingly, we

agree with Owner that the trial court erred in granting summary judgment when the

intention of the parties concerning the deed covenants presents a genuine issue of

material fact.10

9

In raising these two potential constructions for the purpose of analysis, we do not mean

to suggest that they are the only viable constructions.

10

We disagree, however, with Owner’s reliance on an unpublished memorandum opinion

of the United Stated District Court for the Middle District of Pennsylvania (district court) in

Collazo v. Stillwater Lakes Civic Ass’n, Inc. (M.D. Pa., No. 3:CV-99-0931, filed August 2, 2002).

Owner asserts that, in Collazo, the parties ultimately entered into a settlement agreement whereby

Collazo terminated his membership in the Association, showing that the deed covenants do not

absolutely require membership in the association or payment for recreational facilities. Collazo is

not mandatory authority, however, and it does not resolve the proper construction of the deed

covenants, which requires consideration of the circumstances surrounding the initial conveyance

of the Properties that occurred some 20 years before Collazo was decided.

12

2. Obligation Under Act

The trial court also based its grant of summary judgment on the theory

that the Act authorizes the Association to collect assessments for the community’s

common elements, including the recreational facilities. Although the community,

the Association, and the deed covenants were all created before the Act became

effective, “certain provisions of the [Act] retroactively apply to all planned

communities created before the [Act]’s effective date.” Pinecrest Lake Cmty. Tr. ex

rel. Carroll v. Monroe Cty. Bd. of Assessment Appeals, 64 A.3d 71, 74 (Pa.

Cmwlth. 2013) (emphasis omitted). We have applied the definition of “planned

community” from Section 5103 of the Act retroactively in many cases to determine

whether a pre-Act conveyance creates a planned community. See, e.g., id. at 75;

Rybarchyk v. Pocono Summit Lake Prop. Owners Ass’n, Inc., 49 A.3d 31, 35

(Pa. Cmwlth. 2012), appeal denied, 68 A.3d 910 (Pa. 2013). The Act defines

“planned community” as:

Real estate with respect to which a person, by virtue of

ownership of an interest in any portion of the real estate,

is or may become obligated by covenant, easement, or

agreement imposed on the owner’s interest to pay any

amount for real property taxes, insurance, maintenance,

repair, improvement, management, administration or

regulation of any part of the real estate other than the

portion or interest owned solely by the person . . . .

68 Pa. C.S. § 5103.

Here, given our construction of the deed covenants, it is clear that, in

the language of the Act, Owner “is . . . obligated by covenant . . . to pay [an] amount

for . . . maintenance” of, at a minimum, the roadways within the community.

Accordingly, we agree with Appellees that the Properties are part of a planned

community and are subject to the Act to the extent that its provisions apply

13

retroactively. That is not, however, the end of our inquiry, for retroactive application

of the Act “do[es] not invalidate specific provisions contained in existing provisions

of [a] declaration.” 68 Pa. C.S. § 5102(b). This protection of preexisting

arrangements, even if they are contrary to the Act’s requirements, reflects a concern

“that the application of certain organizational requirements of the [Act] to

pre[]existing planned communities could violate the constitutional prohibition

against impairment of contracts and lead to confusion among unit owners and

declarants.” Pinecrest Lake, 64 A.3d at 80.

Accordingly, Pennsylvania courts have upheld the organizational

structure of pre-Act planned communities even when the regime of underlying

covenants differs dramatically from the Act’s requirements or typical planned

community arrangements. In Pinecrest Lake, we examined a pre-Act planned

community created by a trust agreement requiring all unit owners to make payments

to the trust. We determined that an entity such as the trust need not meet the formal

requirements of Section 5301 of the Act11 to qualify as an “association.” Instead,

we examined the functional legal regime created by the trust agreement, noting that

unit owners paid dues to and were the sole beneficiaries of the trust. We concluded

that, because “the [t]rust performs the essential protective functions of an owners’

11

Section 5301 of the Act provides:

A unit owners’ association shall be organized no later than the date the first

unit in the planned community is conveyed to a person other than a successor

declarant. The membership of the association at all times shall consist exclusively

of all the unit owners or, following termination of the planned community, of all

former unit owners entitled to distributions of proceeds under [S]ection 5218 [of

the Act] (relating to easement to facilitate completion, conversion and expansion)

or their heirs, successors or assigns. The association shall be organized as a profit

or nonprofit corporation or as an unincorporated association.

(Emphasis added.) The trust in Pinecrest Lake was obviously not formally consistent with the last

sentence of Section 5301.

14

association,” the trust could constitute an “association” under the Act without

meeting the formal requirements of Section 5301. Pinecrest Lake, 64 A.3d at 80-81.

In Little Mountain Community Association, Inc. v. Southern Columbia

Corp., 92 A.3d 1191 (Pa. Super. 2014), the Superior Court went further, holding

that, because Section 5301 of the Act is not retroactive, the Act does not require the

formation of a unit owners’ association at all. Id. at 1198. The court noted that the

restrictions of record authorized, but did not require, the developer to assign

responsibility for common elements to a third party. Id. at 1194. The court held that

an organization of unit owners could not, under the auspices of the Act, force the

developer to turn over maintenance responsibilities to them when the restrictions of

record did not require the formation of an association. See id. at 1198.

In the instant case, with respect to roadways, the deed covenants impose

a mandatory requirement of payment in perpetuity, together with a perpetual right

to benefit from the roadways. Accordingly, under Pinecrest Lake, the Association

qualifies as an “association” under the Act for purposes of roadway ownership and

maintenance, and, thus, the Association may collect assessments for roadway

maintenance under Section 5302(a)(2) of the Act.12 With respect to recreational

facilities, however, the deed covenants are not clear and, once properly construed,

might create rights and obligations which, although markedly different from the

Act’s compulsory assessment regime, we would be bound to preserve. Thus,

although Appellees (and the trial court) are generally correct that the Association has

authority under the Act, we cannot agree that, as a matter of law, the Act authorizes

Section 5302(a)(2) of the Act permits “the association” to “collect assessments for

12

common expenses from unit owners.” Section 5302(a)(2) is retroactive. 68 Pa. C.S. § 5102(b).

15

the particular assessments in dispute here (i.e., those for recreational facilities).

Summary judgment was, therefore, not supported by the Act alone.

3. Obligation Under Common Law

We next consider whether, under common law, the Association may

collect mandatory recreation area assessments from Owner. The first common law

case the parties cite and discuss is Meadow Run & Mountain Lake Park Association

v. Berkel, 598 A.2d 1024, 1026 (Pa. Super. 1991), appeal denied, 610 A.2d 46

(Pa. 1992), which was decided before the Act was effective. In Meadow Run, the

owner’s deed granted the right to use the community’s roads, lakes, and other

common elements. The deed also contained the following language:

In the event of the formation or incorporation of an

association of the lot owners on above[-]mentioned plot of

Mountain and Meadow Run Lakes, the occupants of the

above[-]described premises shall be bound by such rules

and regulations concerning the use of Mountain and

Meadow Run Lakes as to boating, bathing, ice skating and

fishing, as may be duly formulated and adopted by such

association or incorporation.

Meadow Run, 598 A.2d at 1026 (emphasis added). The Superior Court held that the

owner was obligated under common law to pay the assessments for the roads, lakes,

and other common elements to the association, because: (1) the owner enjoyed,

pursuant to the deed, the right to use and benefit from those areas; and (2) the deed

informed the owner that, in the future, he would necessarily become subject to the

association’s rules and regulations. Id. at 1026-27.

In Rybarchyk, the owner’s deed granted the right to access a lake in the

community. Following the community’s creation, some owners voluntarily formed

an association, which constructed a clubhouse using voluntary donations and

eventually purchased the lake from a third-party owner. Much later, the association

16

attempted to impose mandatory assessments on all unit owners in the community.

After concluding that the Act did not apply, we examined whether the association

could collect assessments under common law. We distinguished the case from

Meadow Run by noting that, although Rybarchyk’s deed granted the right to use the

lake, it did not allow use of other association amenities (such as the clubhouse,

beach, pavilion, and boat launches), which had, at times, been restricted to use by

association members only. Rybarchyk, 49 A.3d at 36-37. We also observed that,

unlike in Meadow Run, Rybarchyk’s deed contained no notice that an association

might be formed and impose binding regulations in the future. Id.

Here, because the meaning of the deed covenants remains unclear, it is

not clear whether Owner’s chain of title gives sufficient notice and use rights to bind

Owner to pay recreational assessments (as in Meadow Run) or whether Owner’s

payment obligation is based only on his voluntary membership (as in Rybarchyk).

Accordingly, the trial court erred in concluding that Owner’s “right to use the . . .

common areas in the community” compels him to “contribute to expenses” for those

areas. (R.R. at 458a.) As we have discussed, there are genuine factual questions

concerning whether the deed covenants impose such a requirement, and the trial

court erred in granting summary judgment on that basis.

B. Voluntary Membership in Association

Even if Owner’s chain of title does not require him to pay assessments

for the recreational facilities, he could have such an obligation through voluntary

membership in the Association. See Huddleson v. Lake Watawga Prop. Owners

Ass’n, 76 A.3d 68, 73 (Pa. Cmwlth. 2013) (“[N]othing . . . gives [an association] the

right to bind non[]members or make membership mandatory absent a shared

obligation.”), appeal denied, 84 A.3d 1065 (Pa. 2014). If Appellees could establish

17

that, as a matter of law, Owner voluntarily joined and remained a member of the

Association, then the trial court’s error in granting summary judgment based on the

deed covenants and the Act would be harmless. Accordingly, we now consider

whether summary judgment was warranted on the issue of voluntary membership.

Owner argues that there are genuine issues of material fact regarding

(1) whether he ever joined the Association, and (2) if he did, whether the termination

letter effectively terminated his membership. In response, Appellees argue that,

under the doctrine of equitable estoppel, Owner’s undisputed actions show he was a

member of the Association. Appellees also emphasize that Owner “did not engage

in any discovery . . . relative to . . . whether he was or was not a member,” and they

argue that Owner’s response to Appellees’ summary judgment motion failed to

identify evidence showing a genuine issue of material fact as to voluntary

membership. (Br. of Appellees at 11 n.1.)

Appellees are correct that a nonmoving party may not remain silent at

summary judgment but must, instead, identify “one or more issues of fact arising

from evidence in the record controverting the evidence cited in support of the

motion.” Pa. R.C.P. No. 1035.3(a)(1). Appellees’ summary judgment motion and

supporting brief before the trial court relied on three items in the record—Owner’s

deposition, the termination letter (which Appellees attached to the motion), and the

testimonial affidavit of the Association’s property manager. In the motion,

Appellees argued that Owner should be estopped from denying his membership in

the Association based on (1) admissions in his deposition that he paid assessments,

attended Association meetings, and used the lake for fishing and boating; and (2) his

statement in the termination letter that he was “terminating [his] membership with

the [Association],” (R.R. at 295a (emphasis added)), and his failure to assert

18

nonmembership in the termination letter. In his response and brief opposing

summary judgment, Owner argued that these facts are not sufficient to show his

membership in the Association. He specifically argued that his fishing and boating

on the lake do not reflect membership in the Association but, instead, reflect his

understanding that, pursuant to covenant 20, he enjoys easement rights to access the

lake from his lakefront property regardless of his membership in the Association.13

Owner did not specifically identify other disputed facts.

Although Owner’s response to the summary judgment motion is not

comprehensive, it was timely filed and it articulates at least one genuine dispute

about the implication of Owner’s admitted use of the lake. Even where factual

events themselves are undisputed, summary judgment is inappropriate where there

is a genuine dispute about the inferences to be drawn from the facts. See Laich v.

Bracey, 776 A.2d 1022, 1024 (Pa. Cmwlth. 2001) (requiring that, on summary

judgment, “the record and any inferences therefrom” must be viewed in the

nonmoving party’s favor (emphasis added)). Here, although Owner admits his use

of the lake, he disputes the inference that his use was based on his acquiescence in

membership in the Association. He also provided a plausible alternative inference

(that he used the lake pursuant to easement rights). The doubt created by this

dispute—squarely addressed in Owner’s response to the summary judgment

motion—must be resolved in Owner’s favor and against Appellees.14 Id.

13

The issue of whether nonmember owners of lakefront property enjoy legal rights to use

the lake, beyond an easement right for ingress and egress “to” (and from) the lake, as provided in

covenant 20, is not before this Court. Nothing in this opinion should be construed as addressing

Owner’s argument that he enjoys such rights.

14

Contrary to what Appellees appear to suggest, Pennsylvania Rule of Civil

Procedure 1035.3 does not require a nonmoving party to offer its own evidence in response to a

summary judgment motion. It simply requires that it identify evidence in the record that supports

19

We note several other facts on which Appellees rely that deserve

interpretation in Owner’s favor on summary judgment. Appellees construe Owner’s

past payment of assessments as evidence of Owner’s voluntary membership in the

Association. Owner explained in his deposition testimony, however, that he paid

the assessments as a matter of course without understanding their basis. He also

explained that he asked for a separate accounting of membership fees (as opposed

to, inter alia, road maintenance costs), and that he ceased payment when the

Association refused to provide one. Owner’s admission of liability for road and

sewer maintenance costs plausibly explains his prior payments to the Association.

This also might explain why, as Appellees emphasize, Owner attended at least two

meetings of the Association. In the only detailed testimony he gave about a meeting

he attended (but at which he did not vote and was not allowed to speak), Owner

stated that he sought to discuss sewer issues with which he would be concerned

regardless of membership.

It is the role of a factfinder “to resolve . . . conflicting inferences that

may be drawn from the facts.” Thompson v. Nason Hosp., 535 A.2d 1177, 1178-79

(Pa. Super. 1988), aff’d, 591 A.2d 703 (Pa. 1991). Here, the facts support competing

inferences, and it is likely that further discovery will assist a factfinder in

determining which inferences are credible. Additionally, under Pennsylvania’s

well-established Nanty-Glo rule,15 summary judgment cannot be supported by

its claim to a genuine issue of material fact. Here, Owner filed such a response. Moreover, we

note that even if Owner had filed no response to the motion, that failure would permit, but would

not require, entry of summary judgment. Pa. R.C.P. No. 1035.3(d) (“Summary judgment may be

entered against a party who does not respond.” (emphasis added)); Payton v. Pa. Sling Co.,

710 A.2d 1221, 1224 (Pa. Super. 1998) (“[A] trial court may, at its discretion, enter judgment

against a party that fails to respond to a summary judgment motion.”).

15

See Penn Ctr. House, Inc. v. Hoffman, 553 A.2d 900, 903 (Pa. 1989) (discussing

Nanty-Glo v. Am. Sur. Co., 163 A. 523 (Pa. 1932)).

20

testimonial evidence (i.e., depositions and affidavits) alone unless the testimony is

an admission by the nonmoving party that “conclusively establish[es] a material fact

and [is] not . . . subject to rebuttal.” DeArmitt v. N.Y. Life Ins. Co., 73 A.3d 578, 595

(Pa. Super. 2013) (emphasis added). Owner’s testimony, although an admission, is

inconclusive because it is open to competing interpretations. Owner has essentially

articulated how he would rebut Appellees’ interpretation of his testimony before a

factfinder. For this reason, the record (viewed in the light most favorable to Owner)

supports Owner’s assertion that a genuine issue of fact exists regarding whether he

was ever a member of the Association.16 Summary judgment was, therefore, not

appropriate. See Toy, 928 A.2d at 194-95.17

IV. CONCLUSION

For the foregoing reasons, the trial court erred in granting summary

judgment in favor of Appellees. Accordingly, we will reverse the trial court’s orders

and remand this matter to the trial court.

P. KEVIN BROBSON, Judge

16

We also note that there may be a genuine dispute regarding Owner’s purported

termination of membership. Owner testified that, at some point following his attempted

termination, the Association’s grievance committee acknowledged that Owner was not a member

of the Association. (See S.R.R. at 39b-41b.) Given that Appellees’ argument for Owner’s

membership sounds in equitable estoppel, a dispute about whether the Association accepted

Owner’s attempted termination or otherwise confirmed that he was not a member is material.

17

Given this determination, we do not consider Owner’s other arguments on appeal.

21

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Stillwater Lakes Civic Association, Inc. :

and Stillwater Sewer Corporation :

:

v. : No. 998 C.D. 2018

:

George Kuzni, :

Appellant :

ORDER

AND NOW, this 5th day of February 2020, the orders of the Court

of Common Pleas of Monroe County (trial court) dated March 13, 2017, and

June 6, 2018, respectively, are REVERSED, and this matter is REMANDED to the

trial court for proceedings consistent with the accompanying opinion.

Jurisdiction relinquished.

P. KEVIN BROBSON, Judge