Twin Lakes Village Property Association, Inc. v. Aune

The Twin Lakes Village Subdivision originally had a nine-hole golf course, a clubhouse, tennis courts, a swimming pool, and other amenities for the use of the members of the Twin Lakes Village Property Association Inc. (the association) (plaintiff). Subdivision covenants and restrictions provided that although the bylaws could be repealed or amended for multiple purposes, they could not be amended in any manner that would deprive any member of existing rights or that would effect a fundamental change in association policies. When the corporation that ran the subdivision’s properties gave notice that it would no longer be serving that role, the association explored ways to continue the operation of its amenities and other services, including a plan to purchase the gold course, additional property for the construction of a second nine-hole golf course, and all other then-existing amenities. To implement the plan, the association proposed and received membership passage of amendments to the bylaws and protective covenants that (1) changed the voting structure of the membership from a weighted system based on square footage of property owned within the subdivision to a one lot, one vote system; and (2) eliminated the provisions that prohibited amendments that would deprive a member of existing rights or that would effect a fundamental change in association policies. The association then levied an assessment against all members for the purposes of implementing the plan. After several association members failed to pay the new assessment, the association sought a declaratory judgment, and the objecting lot owners (defendants) counterclaimed and alleged that the actions taken by the association regarding the amendments and the new assessment were invalid. The trial court ruled for the association, finding that the amendments were lawful, that they did not effect a fundamental change in association policy, and that the new voting system did not prejudice any owner’s existing rights. The objecting lot owners appealed, arguing that the amendments eliminating the protective covenant violated the covenant that was thereby eliminated, and that the new voting system deprived them of an existing right. The association argued that the amendment changing the voting system did not eliminate but merely permissibly diminished the voting rights of some members.