Parker v. Figure “8” Beach Homeowners’ Association, Inc.

Figure 8 Island, a privately owned island off the coast of North Carolina, was governed by the bylaws and restrictive covenants of the Figure “8” Beach Homeowners’ Association, Inc. (HOA) (defendant). The covenants required the island’s property owners, all of whom were members of the HOA, to pay annual assessments in an amount determined by the HOA board. The covenants also allowed the board to levy additional assessments as it deemed necessary, subject to a requirement that a majority of HOA members approve any additional assessment in excess of $60,000. The covenants allowed the HOA to use assessments for a variety of purposes, including the maintenance and improvement of waterways, channel dredging and beach renourishment, and payment of governmental charges of all kinds and descriptions. The declaration of covenants included maps identifying several areas to be dredged and maintained using assessed funds. In 2001, the HOA proposed a costly special assessment to assist local municipalities with the dredging and maintenance of Mason Inlet, a local waterway that was to be relocated to provide residents with improved access to the Atlantic Ocean. The HOA voted on the assessment using a ballot that explained the potential cost of the dredging and informed the members that maintenance of the relocated inlet would require 30 years of regular dredging. A majority of the HOA members approved the special assessment, despite the fact that Mason Inlet was not expressly identified by the covenants as an area to be dredged. Raymond Clifton Parker (plaintiff), a resident of Figure 8 Island, sued to have the assessment annulled. Parker argued that Mason Inlet was not identified in the covenants as a community area requiring maintenance and thus it could not have been intended to be included in the covenants’ maintenance provisions. The trial court granted the HOA’s motion for summary judgment, and Parker appealed.