April 5, 2016
From Beaufort County Carmen T. Mullen, Circuit Court Judge
Ford and Neil Davis Thomson, both of Ford Wallace Thomson
LLC, of Charleston, for Appellants.
Dawes Cooke, Jr., John William Fletcher, and Bradley B.
Banias, all of Barnwell Whaley Patterson & Helms, LLC, of
Charleston; Stephen P. Hughes and James Andrew Yoho, both of
Howell Gibson & Hughes, PA, of Beaufort, for Respondent.
D. Dennis and Jeanette Dennis (Appellants) appeal the circuit
court's grant of the Callawassie Island Members Club,
Inc.'s motion for summary judgment. We reverse and remand
to the circuit court.
1999, Appellants purchased property on Callawassie Island, a
private island located between Beaufort and Hilton Head
Island. They also purchased a membership in the Callawassie
Island Club (CIC). The provisions governing membership in CIC
were memorialized in the Plan for Offering of Memberships in
the Callawassie Island Club (CIC Plan). In 2001, CIC members
purchased the club's assets and took over operation of
the club under a new name, the Callawassie Island Members
Club (CIMC). In conjunction with the purchase, CIMC issued an
amended plan for offering of membership (CIMC Plan) and
established its own general club rules (GCR) and bylaws.
November 2010, Appellants stopped paying dues to CIMC,
asserting their tender of a letter of resignation to CIMC
relieved them of any further obligation to CIMC. Thereafter,
in August 2011, CIMC filed a breach of contract action
against Appellants for the collection of unpaid dues, fees,
assessments, and other charges. CIMC asserted the CIMC Plan,
like the CIC Plan before it, required resigned members remain
in good standing with CIMC until their memberships were
reissued by CIMC. CIMC maintained Appellants were CIMC
members and were bound by the CIMC Plan. According to CIMC,
Appellants paid a $4, 000 assessment required of members at
the time of the transfer of assets from CIC to CIMC, were
issued a membership certificate to CIMC, and continued to
enjoy membership privileges for a number of years.
answered the complaint, alleging they were informed by CIMC
management that club members who joined prior to 2001 would
not be required to maintain a membership but could resign
their membership at the member's discretion. Appellants
further asserted the GCRs provide that members not paying
dues will be suspended for four months, and members whose
accounts are not settled within those four months shall be
expelled from CIMC. Appellants asserted the GCRs provide that
dues and fees do not accumulate as a result of an expulsion.
Appellants also claimed CIMC did not maintain a fair and
reasonable process for the termination of memberships, failed
to allow members to approve fundamental changes to
members' rights, failed to act in good faith, and made
material misrepresentations to Appellants. Additionally,
Appellants asserted counterclaims for breach of fiduciary
duty and negligent misrepresentation.
September 30, 2013, CIMC filed a motion for summary judgment.
CIMC argued its contracts with Appellants (including the CIMC
Plan, the GCRs, and the bylaws) were unambiguous in their
collective requirement that a member must remain in good
standing with CIMC until his membership is reissued. CIMC
further argued the South Carolina Nonprofit Corporation
(the Act) provides that a member is not relieved from any
obligations which were incurred, or commitments which were
made, while he was still a member.
a hearing in November 2013, the circuit court granted
CIMC's motion for summary judgment on January 15, 2014.
The court found CIMC's governing documents were
unambiguous and clearly required a resigned member to pay
dues until his membership is reissued. The court further
found there was no evidence of fraud or bad faith on the part
of the CIMC Board of Directors (CIMC Board), and the Act
clearly provides that a member cannot void a contractual
undertaking simply by leaving a club. The court also found
CIMC was entitled to summary judgment on Appellants'
breach of fiduciary duty and negligent misrepresentation
claims. The court awarded CIMC $51, 131.76 in unpaid
dues and attorney's fees.
Appellants filed a motion for reconsideration, objecting to
the form of the summary judgment order and the legal standard
employed by the court in reaching its determination. They
alleged there were questions of fact for the jury to decide,
including what documents apply and bind the parties; what
documents constitute a contract between the parties; the
amount of damages owed; whether CIMC is bound by statements
of its agents that Appellants would accumulate no more than
four months of dues and fees before being expelled; whether
it violates state law for Appellants to be treated
differently than other similarly situated members; and
whether it violates state law to not allow Appellants to
a hearing in May 2014, the circuit court issued an amended
order, once again granting CIMC summary judgment and denying
Appellants' motion to reconsider. This appeal followed.