Spencer Creek, L.L.C. v. Linville Ridge Prop. Owners’ Ass’n, Inc., 2026 NCBC 74.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
AVERY COUNTY 25CV001257-050
SPENCER CREEK, L.L.C., and
MARK FARBMAN, Individually
and on behalf of All Others
Similarly Situated,
Plaintiffs, ORDER AND OPINION ON
DEFENDANTS’ MOTION TO DISMISS
v.
LINVILLE RIDGE PROPERTY
OWNERS’ ASSOCIATION, INC.
and RYAN DUFFY,
Defendants.
1. This matter is before the Court on Defendants’ Rule 12(b)(6) and Rule
12(b)(7) motion to dismiss. (ECF No. 15). 1
2. Having considered the motion to dismiss, the complaint, the arguments of
counsel, and applicable law, the Court GRANTS IN PART and DENIES IN PART
the motion as set forth below.
Mark Farbman, PA, by Mark Farbman, for Plaintiffs Spencer Creek,
L.L.C. and Mark Farbman.
Cozen O’Connor, P.C., by Charles Kinney, for Defendants Linville Ridge
Property Owners’ Association, Inc. and Ryan Duffy.
Houston, Judge.
1 Defendants’ motion is framed as a “Motion to Dismiss, Motion to Disqualify,” seeking two
separate types of relief and raising two distinct motions, which fails to comply with Rule 7.2 of the Business Court Rules. BCR 7.2 (“Each motion must be filed as a separate document.”). The Court, in the exercise of its judicial discretion, addresses only the “Motion to Dismiss” in this Opinion and will address the “Motion to Disqualify” in a separate order if necessary.
I. BACKGROUND
3. The Court does not make findings of fact in ruling on a Rule 12(b)(6) motion
to dismiss, see Taylor v. Bank of Am., N.A., 382 N.C. 677, 679 (2022), and may, but is
not required to do so, in resolving a Rule 12(b)(7) motion to dismiss, see Brewster v.
Powell Bail Bonding, Inc., 2018 NCBC LEXIS 76, at *2 (N.C. Super. Ct. July 26,
2018); see N.C. R. Civ. P. 52(a). Accordingly, for purposes of context only, the Court
summarizes the relevant allegations of the complaint.
4. Plaintiff Spencer Creek, L.L.C. is the owner of real property located in the
Linville Ridge Development planned community in Avery County, North Carolina
(the “Community”) and is a member of the Linville Ridge Property Owners’
Association, Inc. (ECF No. 3, ¶¶ 1, 6–7). Plaintiff Mark Farbman is the sole officer of
Spencer Creek, resides on the company’s property, and is also counsel for Plaintiffs
in this action. (ECF No. 3, ¶ 2). Farbman, as one of the plaintiffs, apparently also
owns real property within the Community. (ECF No. 3, ¶¶ 5 (asserting that “Plaintiffs
are a singular lot owner within the” Community), 18 (referring to “Plaintiffs[’]
Property”)).
5. Defendant Linville Ridge Property Owners’ Association, Inc. is a North
Carolina non-profit corporation (the “POA”). The owners of properties in the Linville
Ridge development comprise the POA’s membership. (ECF No. 3, ¶¶ 3, 6). A Board
governs the POA, and defendant Ryan Duffy serves as the Board’s president. The Board manages the affairs of the POA through its bylaws (the “Bylaws”) and the
Linville Ridge Declaration of Restrictions. (ECF No. 3, ¶¶ 8–9, 17). 2
6. The Linville Ridge Declaration of Restrictions, dated 26 November 1979, is
recorded in Book 119, Page 578 of the Avery County Registry (the “Declaration”).
(ECF No. 25.2). Section 25 of the Declaration provides as follows:
In the event of a violation or breach of any of these restrictions by any
property owner or agent or agent [sic] of such owner, the Linville Ridge
Development Corporation, the owners of the lots in the neighborhood or
subdivision, or any of them jointly or severally, shall have the right to
proceed at law or in equity to compel a compliance to the terms hereof
or to prevent the violation or breach in any event.
(ECF No. 25.2, ¶ 25).
7. Thus, by its terms, the Declaration provides each lot owner within the
Community the ability to enforce the restrictions and other terms of the Declaration,
including against other property owners within the Community. (ECF No. 25.2, ¶ 25).
8. The Bylaws define the scope of authority of the Board of Directors, including
the steps required for the Board to levy assessments on property owners. 3 (ECF No.
3, ¶ 8).
2 Defendants attached a copy of the Declaration of Restrictions as Exhibit A to their brief in
support of the motion to dismiss. (ECF No. 25.2). Because the Declaration is referenced in and is central to Plaintiffs’ complaint, it is proper for the Court to consider it on a Rule 12(b)(6) motion. See Turpin v. Charlotte Latin Sch., Inc., – N.C. –, 2026 N.C. LEXIS 939, at *12–13 (Aug. 14, 2026); Oberlin Capital, L.P. v. Slavin, 147 N.C. App. 52, 60 (2001) (“[W]hen ruling on a Rule 12(b)(6) motion, a court may properly consider documents which are the subject of a plaintiff’s complaint and to which the complaint specifically refers even though they are presented by the defendant.”).
3 Plaintiffs reference the Bylaws as “Exhibit A” to the complaint. (ECF No. 3, ¶ 8). However,
no such exhibit is attached to the Complaint. In fact, there are no exhibits attached to the complaint. Notwithstanding Rule 3.1 of the Business Court Rules, which requires that all filings with the Court be made electronically through the Court’s electronic filing system (Alpine), Plaintiffs did not file any exhibits referenced in the complaint on the Alpine platform, though Plaintiffs apparently did file these documents on the electronic filing
9. According to Plaintiffs, on 28 April 2025, following devastation from
Hurricane Helene in the fall of 2024, the Board sent an email to members of the POA
announcing an assessment of $7,500 per residence and $5,523.75 per vacant lot to
fund repairs associated with the damage to the Community’s common areas and
roads (the “Repair Assessment”). (ECF No. 3, ¶¶ 21–22).
10. Plaintiffs then requested that the POA provide information, including
detailed calculations to support the assessment of $7,500 per residence, with the POA
subsequently providing an email with a breakdown of repair costs totaling $3,230,783
for the Community. (ECF No. 3, ¶¶ 23–26).
11. Plaintiffs contend that the breakdown of repair costs was incomplete
because it did not contain a specific explanation of how the amount of $7,500 per
residence was determined, did not specifically explain (for Plaintiffs’ analysis) that
the estimated costs were “only for the common areas and common road(s) excluding
non-common areas and non-common road(s),” and did not provide certain other
calculations that Plaintiffs believe would be helpful or appropriate. (ECF No. 3, ¶¶
23–26).
12. Eventually, the POA levied against plaintiff Spencer Creek’s property an
assessment of $7,500 around 1 May 2025, and other members of the POA received
bills for assessments of “either or both” $7,500 per residence and $5,523.75 per vacant
lot. (ECF No. 3, ¶¶ 26–27).
platform utilized by the Avery County Clerk of Superior Court (Odyssey). Because the documents are not properly filed with the Court and have not otherwise been properly placed before the Court, the Court, in its discretion, does not consider them for purposes of this motion but does consider the allegations of the complaint related to the Bylaws.
13. Plaintiff Farbman thereafter engaged with the Board throughout the
summer of 2025, sending further letters demanding calculations and documentation
and seeking other information about the Repair Assessment and whether it was
legally binding. (ECF No. 3, ¶¶ 28–32).
14. Ultimately, the Board informed plaintiff Farbman that the Repair
Assessment was not approved by an affirmative vote of the majority of Class A POA
members and that Defendants had not received insurance proceeds to pay for any of
the damage covered by the Repair Assessment. (ECF No. 3, ¶¶ 29–30).
15. The Bylaws at issue, according to Plaintiffs, provide for “Common
Assessments,” “Special Assessments,” and “Repair and Reconstruction Special
Assessments.” (ECF No. 3, ¶ 33).
16. Plaintiffs contend that the Repair Assessment was “either a Special
Assessment or a Repair and Reconstruction Special Assessment, but not a Common
Assessment,” and that, under the Bylaws, such assessments must be affirmatively
approved by a vote of the majority of the Class A POA members, among other
requirements. (ECF No. 3, ¶¶ 35–36 (emphasis in original)).
17. Thus, Plaintiffs contend that the Repair Assessment was unlawfully levied
against the POA members because the Board and Defendants failed to obtain
approval for the assessment by submitting the assessment to a vote by the POA’s
members, (ECF No. 3, ¶¶ 37–38), failed to observe the requirements of levying a
special assessment provided for in the Bylaws by failing to maintain appropriate
insurance policies, file insurance claims, obtain detailed repair estimates, and provide POA members with the supporting documents and notice, (ECF No. 3, ¶¶ 39–
40).
18. On 10 November 2025, Plaintiffs filed a putative class-action complaint,
asserting putative causes of action for (i) breach of bylaws (i.e., breach of contract)
and declaratory judgment; (ii) injunctive relief; 4 (iii) alleged violations of N.C. Gen.
Stat. § 75-50 et seq. (commonly referred to as the North Carolina Debt Collection Act),
(iv) alleged violations of N.C. Gen. Stat. § 75–1.1 et seq., and (v) breach of fiduciary
duty. (See generally ECF No. 3, ¶¶ 54–97).
19. In the decipherable portions of the declaratory judgment request, Plaintiffs
request that the Court enter declaratory judgments that, in relevant part, declare
that (i) the Repair Assessment breached the Bylaws, (ii) “the past, present, and future
imposition against Plaintiffs and each Class member[] of any [amounts]” is a breach
of the Bylaws and is “unlawful, void, and unenforceable,” and (iii) that the Repair
Assessment “is unlawful, void, and unenforceable against the Plaintiffs and each
members [sic] of the Class,” which putative class Plaintiffs seek to have include all
members of the POA against whom the Repair Assessment was levied. (ECF No. 3,
¶¶ 46, 57–58 (emphasis added)).
20. In turn, Defendants moved to dismiss the action pursuant to Rule 12(b)(6)
of the North Carolina Rules of Civil Procedure for failure to state a claim upon which
4 On 4 March 2026, this Court entered an Order denying plaintiffs’ motion for preliminary
injunction and entering a stay of discovery pending resolution of the motion to dismiss. (ECF No. 30). As the Court previously addressed with counsel during a status conference, the complaint is replete with typographical errors and other issues that compel the Court to question whether Plaintiffs’ counsel actually read the document before filing it. relief can be granted and Rule 12(b)(7) for failure to join necessary parties as required
by Rule 19. (See generally ECF No. 15).
21. With their motion, Defendants sought to “dismiss Plaintiffs’ Complaint in
its entirety, or, at minimum, to dismiss Plaintiffs’ claims for declaratory and
injunctive relief for failure to join necessary parties” and “to dismiss Plaintiff[s’] claim
of ‘Breach of Fiduciary Duty’ for failure to state a claim upon which relief can be
granted.” (ECF No. 15 at 1). Defendants thereafter briefed only the “necessary
parties” issue under Rule 12(b)(7) and the breach of fiduciary duty cause of action
under Rule 12(b)(6) with respect to the motion to dismiss. (See generally ECF No. 14).
22. Briefing has closed on the motion to dismiss, and the matter is ripe for
resolution. The Court determines, in its discretion and pursuant to Rule 7.4 of the
Business Court Rules, that it is appropriate to resolve the motion without a hearing.
See BCR 7.4.
II. ANALYSIS
a. Rule 12(b)(6) Motion to Dismiss
23. When considering a Rule 12(b)(6) motion, the Court must determine
“whether the allegations of the complaint, if treated as true, are sufficient to state a
claim upon which relief can be granted under some legal theory.” Corwin v. Brit. Am.
Tobacco PLC, 371 N.C. 605, 615 (2018) (citation omitted); Forsyth Mem’l Hosp., Inc.
v. Armstrong World Indus., 336 N.C. 438, 442 (1994) (quoting Lynn v. Overlook Dev.,
328 N.C. 689, 692 (1991)).
24. The Court treats the well-pleaded factual allegations as true and views
them “in the light most favorable to the non-moving party.” Sykes v. Health Network
Sols., Inc., 372 N.C. 326, 332 (2019) (citation omitted); Christenbury Eye Ctr., P.A. v.
Medflow, Inc., 370 N.C. 1, 5 (2017).
25. Further, the Court “may properly consider documents which are the subject
of a plaintiff’s complaint and to which the complaint specifically refers” regardless of
the party that presents them. Turpin, 2026 N.C. LEXIS 939, at *12 (quoting Oberlin
Cap., L.P., 147 N.C. App. at 60 (2001)).
26. The Court “can reject allegations that are contradicted by the documents
attached, specifically referred to, or incorporated by reference in the complaint.” Moch
v. A.M. Pappas & Assocs., LLC, 251 N.C. App. 198, 206 (2016) (citations omitted).
27. Dismissal on a Rule 12(b)(6) motion is proper if “(1) the complaint on its
face reveals that no law supports the plaintiff’s claim; (2) the complaint on its face
reveals the absence of facts sufficient to make a good claim; or (3) the complaint
discloses some fact that necessarily defeats the plaintiff’s claim.” Corwin, 371 N.C. at
615 (citations omitted).
i. Breach of Fiduciary Duty
28. The only specific cause of action as to which Defendants move for dismissal
under Rule 12(b)(6) is Plaintiffs’ cause of action for breach of fiduciary duty.
29. In their complaint and in support of their breach of fiduciary duty cause of
action, Plaintiffs assert as follows:
The Defendants and the Defendants’ Board of Directors breach [sic]
their fiduciary duties to all of the POA’s members that are the Plaintiffs
and the members of the putative Class by inattentive or uninformed
[sic], acted in bad faith, and their decision was unreasonable. In
particular, the Defendants, Defendants’ Board of Directors, and the
Board’s Officer President beached [sic] their duties by levying the Repair
Assessment in violation of the Bylaws’ procedures.
(ECF No. 3, ¶ 95). 5
30. “To establish a claim for breach of fiduciary duty, a plaintiff must show that:
(1) the defendant owed the plaintiff a fiduciary duty; (2) the defendant breached that
fiduciary duty; and (3) the breach of fiduciary duty was a proximate cause of injury
to the plaintiff.” Sykes, 372 N.C. at 339.
31. “For a breach of fiduciary duty to exist, there must first be a fiduciary
relationship between the parties.” Dalton v. Camp, 353 N.C. 647, 651 (2001) (citations
omitted).
32. Plaintiffs allege that Defendants owe a statutory fiduciary duty pursuant
to N.C. Gen. Stat. § 47F-3-103(a), which Plaintiffs incorrectly purport to quote as
follows:
In performance of their duties, the Defendants’ Board’s officers and
POA’s members “shall be deemed to stand in a fiduciary relationship to
the association and the unit owners and shall discharge their duties in
good faith, and with that diligence and care which ordinarily prudent
persons would exercise under similar circumstances in like positions.”
N.C.G.S. 47F-3-103(a), NCPCA.
(ECF No. 3, ¶ 94).
31. N.C. Gen. Stat. § 47F-3-103(a), however, contains no such language.
Instead, the language that Plaintiffs quote and attribute to § 47F-3-103(a) is from
5 Plaintiffs refer to “[t]he three Defendants’ fiduciary duties for its Members that are the
Plaintiffs . . .” (ECF No. 3, ¶ 89). There are, however, only two defendants in this action—the POA and Duffy—and the Court addresses those Defendants accordingly.
N.C. Gen. Stat. § 47C-3-103(a), the North Carolina Condominium Act, even though
Plaintiffs do not allege facts suggesting that Defendants are in any way involved in a
condominium association. 6
32. To the contrary, Plaintiffs allege that the POA is a nonprofit property
owners corporation, (ECF No. 3, ¶ 94), to which the North Carolina Nonprofit
Corporation Act applies. See generally N.C. Gen. Stat. § 55A-1-01 et seq.
33. As to Plaintiffs’ cause of action against Defendants, the cause of action is
not asserted derivatively, and there are simply no factual allegations that would
permit an inference of a fiduciary relationship between Plaintiffs and Defendants.
34. As this Court has recognized, “the North Carolina Nonprofit Corporation
Act requires a director to act in the best interests of the nonprofit corporation, not its
6 The Court notes that Plaintiffs’ brief contains numerous overstatements or misstatements
of applicable law. (See, e.g., ECF No. 23 at 21 (citing Taddei v. Vill. Creek Prop. Owners Ass’n., 220 N.C. App. 487 (2012); Adum v. Albemarle Plantation Prop. Owners Ass’n., 2021 NCBC LEXIS 6 (N.C. Super. Ct. Jan. 19, 2021)). Indeed, in at least one instance, Plaintiffs flat-out misrepresent the holding of a prior Business Court case, incorrectly asserting that this Court held
that the non-profit homeowners’ board and the board’s delegated architectural
review committee owed a statutory-imposed fiduciary duty to the property
owners pursuant to N.C. Gen. Stat. 55A-8-30. Pittenger v. Gleneagles Homes
Ass’n., 2020 NCBC 85, 2020 NCBC LEXIS 141 at ¶¶ 65-66 (decided December
1, 2020).
(ECF No. 23, at 21–22). Nowhere did the Court so hold. Rather, the Pittenger court specifically noted that “[t]he Court finds no reasoned factual or legal basis to impose on the Board or ARC members an individual fiduciary duty to individual homeowners beyond their duty owed to the Association to implement the Covenants reasonably and in good faith. Any fiduciary duty directors and officers of a homeowner’s association owe is to the homeowner’s association they represent.” Pittenger, 2020 NCBC LEXIS 141, at *27 (emphasis added) (citations omitted). The Court is profoundly troubled by Plaintiffs’ mischaracterizations, particularly when combined with other substantive issues previously addressed with counsel in this case. The Court takes under advisement the issue of potential sanctions under Rule 11 and in the Court’s inherent authority.
members.” Brock v. Kyryk, 2026 NCBC LEXIS 138, at *12 (N.C. Super. Ct. July 8,
2026) (quoting Port Trinitie Homeowners Ass’n, Inc. v. Port Trinitie Ass’n, Inc., 2025
NCBC LEXIS 100, at *22 (N.C. Super. Ct. Aug. 7, 2025)); see also N.C. Gen. Stat. §
55A-8-30(a)(1)–(3); Vill. at Motts Landing Homeowners’ Ass’n v. Aftew Props., 2023
NCBC LEXIS 100, at *8 (N.C. Super. Ct. Aug. 14, 2023).
35. Thus, absent non-conclusory factual allegations supporting any other basis
for a fiduciary relationship between Plaintiffs (as purported members of the POA)
and defendant Duffy, this cause of action fails as a matter of law.
36. “Similarly, Plaintiffs have failed to plead any facts suggesting that the
[POA] itself owes a fiduciary duty to Plaintiffs.” Brock, 2026 NCBC LEXIS 138, at
*12; (ECF No. 3, ¶¶ 85-95 (asserting, in conclusory fashion, that the POA owes
fiduciary duties to Plaintiffs based on (i) its Board’s obligation to act using reasonable
business judgment, and (ii) Plaintiffs’ misguided, and conclusory, attribution of the
Condominium Act to this action, despite no supporting factual allegations)); see Port
Trinitie, 2025 NCBC LEXIS 100, at *22 (explaining that the relationship between
members and a property owners’ association is generally contractual, and not
fiduciary, in nature absent facts demonstrating a de facto fiduciary relationship).
37. Accordingly, Plaintiffs’ cause of action against Defendants for breach of
fiduciary duty fails and is appropriately dismissed on this basis. Port Trinitie, 2025
NCBC LEXIS 100, at *22; Brock, 2026 NCBC LEXIS 138, at *12–13 (discussing case
law explaining that, “under the analogous Business Corporation Act, ‘[t]he General
Assembly has expressly indicated its intent ‘to avoid an interpretation [of N.C.G.S. § 55-8-30] . . . that would give shareholders a direct right of action on claims that should
be asserted derivatively and to avoid giving creditors a generalized fiduciary claim.’”
(quoting Green v. Freeman, 367 N.C. 136, 141 (2013))).
38. Thus, as to Plaintiffs’ cause of action for breach of fiduciary duty,
Defendants’ motion is GRANTED, and Plaintiffs’ cause of action for breach of
fiduciary duty is DISMISSED with prejudice. 7
ii. Injunctive Relief
39. Plaintiffs’ putative “second cause of action” for an “inju[n]ction” fails as a
matter of law. (ECF No. 3 at 21).
40. As this Court has explained, “[i]nasmuch as [Plaintiffs] purport[] to assert
‘claims’ for injunctive relief, . . . such ‘claims’ inherently fail as a matter of law
because, as this Court and others have repeatedly recognized, they are not
independent causes of action or claims.” Brock, 2026 NCBC LEXIS 138, at *17
(quoting Evergreen Builder Sols., LLC v. Taylor, 2025 NCBC LEXIS 174, at *31–32
(N.C. Super. Ct. Dec. 29, 2025) (other citations omitted); e.g., Brier Creek Owners
Ass’n v. Brier Creek Country Club Owners Ass’n, 2026 NCBC LEXIS 98, at *8 (N.C.
Super. Ct. Apr. 27, 2026) (same); see also Revelle v. Chamblee, 168 N.C. App. 227, 230
(2005) (“A preliminary injunction is an ancillary remedy, not an independent cause
of action.”); Brewster v. Powell Bail Bonding, Inc., 2018 NCBC LEXIS 76, at *18 (N.C.
7 “The decision to dismiss an action with or without prejudice is in the discretion of the trial
court[.]” First Fed. Bank v. Aldridge, 230 N.C. App. 187, 191 (2013) (citation omitted). With respect to each of the causes of action addressed by this Order and Opinion, the Court has carefully considered whether dismissal with or without prejudice is appropriate and has exercised its discretion accordingly.
Super. Ct. July 26, 2018) (“[I]njunctions are remedies, not independent causes of
action.” (citation omitted)).
41. The Court apparently cannot emphasize this enough: a request for
injunctive relief is not a cause of action, and parties should stop raising such a request
as if it is.
42. Thus, as to Plaintiffs’ putative cause of action for injunctive relief,
Defendants’ motion is GRANTED, 8 and Plaintiffs’ cause of action for injunctive relief
is DISMISSED without prejudice to Plaintiffs’ ability to seek injunctive relief as
a remedy if appropriate.
b. Rule 12(b)(7) Motion to Dismiss
43. Having addressed Defendants’ Rule 12(b)(6) motion to dismiss, the Court
turns to their Rule 12(b)(7) motion to dismiss for failure to join necessary parties. 9
(ECF No. 14 at 3–6).
8 Defendants move to dismiss the request for injunctive relief in their motion but fail to
address it in their brief beyond two passing references. (ECF No. 14 at 4–5). “Nevertheless, the Court has an ongoing duty to evaluate the causes of action pending before it and to evaluate whether they state claims upon which relief can be granted.” Brock, 2026 NCBC LEXIS 138, at *12 (quoting Maola Ice Cream Co. v. Maola Milk & Ice Cream Co., 238 N.C. 317, 324 (1953) (“If the cause of action, as stated by the plaintiff, is inherently bad, why permit him to proceed further in the case, for if he proves everything that he alleges he must eventually fail in the action.” (citations omitted)), and Tuwamo v. Tuwamo, 248 N.C. App. 441, 445 (2016) (“‘[C]ourts have continuing power to supervise their jurisdiction over the subject matter before them, including the power to dismiss ex mero motu.’” (citations omitted)). Indeed, though the Court does not consider this fact for purposes of resolving the Rule 12(b)(6) motion to dismiss, the Court notes for context that it has already denied Plaintiffs’ separate motion for a preliminary injunction, (ECF No. 30), such that Plaintiffs’ putative cause of action has done little more than waste scarce judicial resources. 9 Though Defendants’ motion does not expressly seek the relief of joinder of proper parties as
an alternative to its motion to dismiss for failure to join necessary parties under Rule 12(b)(7), inasmuch as the Court has discretion to join proper parties on its own motion at any time, the Court addresses the joinder of proper parties in the exercise of judicial discretion. See, e.g., Colbert v. Collins, 227 N.C. 395, 396 (1947) (per curiam). The Court recently addressed
44. Under Rule 19(b) of the North Carolina Rules of Civil Procedure, “when a
complete determination of [a] claim cannot be made without the presence of other
parties, the court shall order such other parties summoned to appear in the action.”
N.C. R. Civ. P. 19(b). Further, under N.C. Gen. Stat. § 1–260, “[w]hen declaratory
relief is sought, all persons shall be made parties who have or claim any interest
which would be affected by the declaration.” N.C. Gen. Stat. § 1-260.
45. “A necessary party is one who is so vitally interested in the controversy that
a valid judgment cannot be rendered in the action completely and finally determining
the controversy without his presence.” Crosrol Carding Devs., Inc. v. Gunter &
Cooke, Inc., 12 N.C. App. 448, 452 (1971) (citing Strickland v. Hughes, 273 N.C. 481
(1968)).
46. Thus, for a party to be necessary, its “interest must be such that no decree
can be rendered which will not affect” the party. Wall v. Sneed, 13 N.C. App. 719, 724
(1972) (citing Gaither Corp. v. Skinner, 238 N.C. 254 (1953)). “The term ‘necessary
parties’ embraces all persons who have or claim material interests in the subject
matter of a controversy, which interests will be directly affected by an adjudication
of the controversy.” Id. (quoting Equitable Life Assurance Soc’y v. Basnight, 234 N.C.
347, 352 (1951)).
47. Conversely, a “proper party is one whose interest may be affected by a
decree, but whose presence is not essential in order for the court to adjudicate the
rights of others.” Crosrol Carding, 12 N.C. App. at 451–52; N.C. R. Civ. P. 20. While
much of this same case law, and many of these same issues, in Covenant Clearinghouse LLC v. D.R. Horton, Inc., 2026 NCBC LEXIS 130 (N.C. Super. Ct. June 19, 2026). a case may be resolved on the merits without the presence of a proper party, in its
discretion, a court may require the joinder of such a party. Crosrol Carding, 12 N.C.
App. at 451–52 (citation omitted); N.C. R. Civ. P. 21 (“[P]arties may be dropped or
added by order of the court on motion of any party or on its own initiative at any stage
of the action.” (emphasis added)); see High Point Bank & Trust Co. v. Highmark
Props., LLC, 368 N.C. 301, 303 (2015).
48. For example, a person owning real property burdened by a restrictive
covenant may be a necessary party if the covenant is mutually enforceable or if a
court’s resolution of an action involving the covenant would otherwise “extinguish[]
property rights without giving the property owner an opportunity to be heard.”
Karner v. Roy White Flowers, Inc., 351 N.C. 433, 440 (2000). However, the assessment
of monetary fees does not inherently extinguish a property right sufficient to make
the owner a necessary party, even when a court’s determination of the merits might
affect potential, unfiled suits for monetary damages by absent parties. Compare
Midsouth Golf, LLC v. Fairfield Harbourside Condo. Ass’n, 187 N.C. App. 22, 27–30
(2007), and Wallach v. Linville Owners Ass’n, 234 N.C. App. 632, 638–39 (2014), with
Karner, 351 N.C. at 440, and Page v. Bald Head Ass’n, 170 N.C. App. 151 (2005).
49. In their briefing, Defendants contend that all members of the POA “must
be added as necessary parties, as every member’s interest would be affected by the
declaration sought in this action[.]” (ECF No. 14 at 5). 10
10 Indeed, pursuant to Rule 201 of the North Carolina Rules of Evidence, the Court takes
judicial notice that plaintiff Spencer Creek, L.L.C. previously filed an action in Avery County District Court that was subsequently transferred to Superior Court (Case No. 25CV000107-050) and in which it sought substantively the same relief requested in this action. On 19
50. Plaintiffs assert that the other members of the POA are not necessary
parties because only the POA can enforce assessments against POA members. (See
generally ECF No. 23 at 5–16). 11
51. As explained above, the declaration that Plaintiffs seek is primarily one for
a determination that the Repair Assessment is a breach of the Bylaws and that it is
“unlawful, void, and unenforceable” as against Plaintiffs and every other member of
the POA. (ECF No. 3, ¶¶ 46, 57–58).
52. Plaintiffs are correct that the Declaration provides that the POA may assert
liens against members’ properties and “may bring an action at law against the owner
personally obligated to pay the same and/or foreclose the lien against the lot subject
to the unpaid assessment or charge[.]” (ECF No. 25.2, ¶ 24(e)).
53. However, as noted above, the “Declaration of Restrictions” also provides
that, “[i]n the event of a violation or breach of any of these restrictions by any property
owner or agent or agent of such owner, . . . the owners of the lots in the neighborhood
September 2025, the Honorable Martin McGee entered an Order requiring Spencer Creek to “join all members of Linville Ridge Property Owners’ Association, Inc. as necessary defendants to this action[.]” (Odyssey Index No. 25). Thereafter, on 25 September 2025, the Honorable Theodore W. McEntire entered an additional Order allowing Spencer Creek to amend but requiring Spencer Creek to join “all members of Linville Ridge Property Owners’ Association, Inc. as necessary defendants to this action” by 3 November 2025. (Odyssey Index No. 29).
11 The Court notes that Plaintiffs filed a second memorandum in opposition to Defendants’
motion on 19 February 2026, the same day the original opposition was filed. (Compare ECF No. 23, with ECF No. 26). The docket entry on the Court’s electronic filing system parenthetically reflects that it is a “(Corrected”) filing. (ECF No. 26). However, Plaintiffs did not seek leave to file an amended memorandum or explain what the purported corrections were, and there is otherwise no apparent basis for a second filing without the Court’s leave. See BCR 7.6 (permitting “a responsive brief” (singular) in response to a motion). Accordingly, the Court STRIKES Plaintiffs’ second, unauthorized filing at ECF No. 26. See BCR 7.1(c) (“The Court has discretion to disregard or strike a filing that does not comply with these rules.”).
or subdivision . . . shall have the right to proceed at law or in equity to compel a
compliance to the terms hereof or to prevent the violation or breach in any event.”
(ECF No. 25.2, ¶ 25 (emphasis added)).
54. Thus, while only the POA is specifically vested with authority under the
Declaration to assert liens against members’ properties, the Declaration is clear that
any other lot owner, as a member of the POA, has “the right” to pursue action at law
or in equity to compel compliance (such as payment of assessments) or to prevent
violations or breaches (such as refusal to pay assessments). (ECF No. 25.2, ¶ 25).
55. Regardless, Plaintiffs do not seek to invalidate a restrictive covenant,
instead seeking a determination that Defendants have breached the Bylaws and that
they cannot validly pursue the same course of action in the future. (ECF No. 23 at 5–
16). And, as the Court previously recognized, “most prior appellate case law on this
subject was in the context of declaring covenants invalid, with courts analyzing
whether nonparties might be at risk of losing property rights.” Covenant
Clearinghouse, 2026 NCBC LEXIS 130, at *25 (comparing Karner, 351 N.C. at 440,
with Midsouth Golf, 187 N.C. App. at 29–30).
56. In a prior action involving many of these issues, plaintiff Spencer Creek
was twice ordered to join all POA members as necessary parties and, rather than
doing so, decided to dismiss that prior action. See Odyssey Index Nos. 25, 29, Spencer
Creek, L.L.C. v. Linville Ridge Property Owners’ Association, Inc., Case No.
25CV000107-050 (N.C. Super. Ct. (Avery Cnty.) Sept. 19 & 25, 2025).
57. Here, even though this is a putative class action in which Plaintiffs seek
certification of a class consisting of all POA members, members of the putative class
(i.e., other POA members) are not currently parties to this action merely by being
designated as unnamed members of a potential class. See Chambers v. Moses H. Cone
Mem. Hosp., 2021 NCBC LEXIS 106, at *3–4 (N.C. Super. Ct. Dec. 3, 2021) (“No
reasonable understanding of ‘opposing party’ would include members of an
uncertified class. True, absent class members are treated as parties for some
purposes after certification. Not so before certification: ‘A nonnamed class member is
not a party to the class-action litigation before the class is certified.’” (emphasis in
original) (quoting Std. Fire Ins. Co. v. Knowles, 568 U.S. 588, 593 (2013))).
58. The Court need not determine, however, whether the non-party property
owners are necessary parties, as the Court determines that they are at least proper
parties, and the Court will order them joined as parties in the exercise of the Court’s
judicial discretion. Wallach, 234 N.C. App. at 637 (“Whether proper parties will be
ordered joined rests within the sound discretion of the trial court.” (citation and
internal quotation marks omitted)); Colbert, 227 N.C. at 396 (“[I]f the parties sought
to be made parties defendant are proper parties the order was within the discretion
of the Court and not subject to review, or if, on the other hand, such parties are
necessary parties, without whose presence a complete determination of the
controversy could not be had, the Court was required to have them brought in as
parties defendant.”).
59. The Declaration purports to bind the lots (and lot owners) within the
Community and to require those lot owners to pay assessments. (E.g., ECF No. 25.2
at 1 & ¶¶ 21, 24(e)).
60. Plaintiffs have already attempted to add all of the other POA members as
parties to this action by filing this matter as a putative class action. They are not yet
parties in that respect, even if Plaintiffs might wish them to be––at least nominally.
See Chambers, 2021 NCBC LEXIS 106, at *3–4; see also Std. Fire Ins. Co., 568 U.S.
at 593.
61. Plaintiffs also assert that
57. The Plaintiffs and Class Members [i.e. other POA members]
are entitled to Declaratory Judgements [sic] . . . that the Repair
Assessment levied and collected by Defendants . . . are [sic] 1)
breach of Bylaws’ procedures by Defendant POA and Defendant
Duffy; 2) breach of Bylaws’ procedure by Defendant POA and
Defendant Duffy that were done willfully, or with the conscious
disregard of the rights of Plaintiffs and each member of the Class;
3) breach of Bylaws’ procedure by Defendant POA and Defendant
Duffy that constitutes discharged [sic] of their fiduciary duties in
bad faith to the Plaintiff and each member of the Class; 4) the
Repair Assessment which is unlawful, void, and unenforceable
against the Plaintiffs and each member of the class; and, 5) any
further Declaratory Judgements [sic] that the Court may deem
just and proper.
[and]
58. Plaintiffs and Class Members are entitled to a Declaratory
Judgements [sic] pursuant to N.C.G.S. 1-253, et seq that the past,
present, and future imposition against Plaintiffs and each Class
members of any and all fines, attorney fees, attorney costs,
expenses attorney, attempts to levy and/or to collect the Repair
Assessment (1) constitutes a breach of the Bylaws; and, (2) are
unlawful, void, and unenforceable.
(ECF No. 3, ¶¶ 57–58 (emphasis added)).
62. Ultimately then, with their request for declaratory relief, Plaintiffs seek a
determination by the Court of the effect and validity of the Repair Assessment as
between the POA and (i) Plaintiffs and (ii) POA members other than Plaintiffs. (ECF
No. 3, ¶¶ 57–58).
63. By its very nature, that request (and the putative class nature of this
action) implicates the non-party POA members’ rights under the Declaration and
Bylaws and the POA’s rights under the Declaration and Bylaws against those nonparty POA members, including whether those non-party POA members are required
to pay the Repair Assessment and whether the POA can enforce the Repair
Assessment against them now or at any point in the future.
64. Further, Plaintiffs’ request purports to require interpretations of both the
Declaration and the Bylaws to which all of the non-party POA members are
purportedly bound. (E.g., ECF No. 25.2 at 1; 8, ¶ 21; 10, ¶ 24(e)).
65. Thus, the Court’s resolution of Plaintiffs’ request for declaratory relief is
likely to affect the other property owners by interpreting and determining the rights
and obligations, if any, of parties under the Declaration and Bylaws. See Crosrol
Carding, 12 N.C. App. at 451 (explaining that a “proper party is one whose interest
may be affected by a decree”).
66. For example, if the Court eventually reaches the issue of whether the
Repair Assessment is or was valid and enforceable, Plaintiffs have identified nothing
at this time that would distinguish the Court’s interpretation of the Declaration and
Bylaws with respect to Plaintiffs and Defendants from the interpretation applicable to the relationship between the non-party POA members and Defendants. Ultimately,
in analyzing the validity and enforceability of the Repair Assessment under those
documents, the Court would be ruling on bases for interpretations of those documents
that those non-party POA members might otherwise raise in separate litigation and
that could result in a determination that the POA is able to enforce the Declaration
and Bylaws and to collect the Repair Assessment and levy against the properties at
issue. As in the Covenant case, “[s]uch circumstances warrant joining those property
owners as parties in this action.” Covenant, 2026 NCBC LEXIS 130, at *27.
67. Though Plaintiffs argue that the non-party POA members simply would not
be bound by the Court’s decision, Plaintiffs’ own complaint seeks class relief, such
that—if Plaintiffs were to receive the relief they request following class certification—
the non-party POA members would be bound by the Court’s decision.
68. Under the circumstances, in its discretion, the Court determines that the
other owners of lots or parcels within the Community are, at a minimum, proper
parties to this action and that it is appropriate to order those lot owners joined as
parties in this action. See N.C. Gen. Stat. § 1–260 (“all persons shall be made parties
who have or claim any interest which would be affected by the declaration”).
69. Rather than comply with the prior court orders requiring plaintiff Spencer
Creek to join all POA members as parties in the predecessor case, Plaintiffs elected
to pursue their current course of action, dismissing that case and apparently
attempting to circumvent the prior joinder orders by seeking class relief in this action
instead. See Odyssey Index Nos. 25, 29, Spencer Creek, Case No. 25CV000107-050. Regardless, while this Court’s analysis might differ slightly from that of the court in
the prior action, the ultimate result is the same—joinder of the other POA members.
If Plaintiffs wish to continue pursuing this course of action, they can do so by making
all other property owners in the Community actual, named parties to this action since
Plaintiffs seek declaratory relief that implicates their rights.
70. Thus, in the exercise of judicial discretion, the Court GRANTS IN PART
Defendants’ request and ORDERS Plaintiffs to join as proper parties to this action
all current members of the Linville Ridge Property Owners’ Association, Inc. (i.e., the
POA) and all prior members of the POA against whom the Repair Assessment was
levied, if any.
71. To the extent that Defendants seek dismissal under Rule 12(b)(7) for failure
to join the POA members as necessary parties, the motion is DENIED WITHOUT
PREJUDICE AS MOOT in light of the joinder of those persons and entities as
proper parties. Further, insofar as Defendants seek dismissal of the action “in its
entirety,” (ECF No. 15), the motion is DENIED WITHOUT PREJUDICE to
Defendants’ ability to file a renewed Rule 12 motion upon the filing of an amended
complaint or to seek such other relief as may be appropriate.
III. CONCLUSION
72. Therefore, the Court GRANTS IN PART and DENIES IN PART
Defendants’ motion as set forth above.
73. In the exercise of judicial discretion, the Court ORDERS that, within
fourteen (14) days of entry of this Order and Opinion, Plaintiffs shall file an amended complaint and join as parties to this action (i) all current members of the Linville
Ridge Property Owners’ Association, Inc. (i.e., the POA) and (ii) all prior members of
the POA against whom the Repair Assessment was levied, if any. Plaintiffs may not
reassert any cause of action dismissed with prejudice by this Order and Opinion. If
an amended complaint is timely filed, Defendants may move in response to, plead in
response to, or otherwise respond to the amended complaint within the time
permitted by Rule 15 of the North Carolina Rules of Civil Procedure.
74. If an amended complaint is not timely filed and if Plaintiffs do not otherwise
seek voluntarily dismissal of this action, this action may be dismissed in its entirety
by the Court pursuant to Rule 41 of the North Carolina Rules of Civil Procedure.
SO ORDERED, this 28th day of August 2026.
/s/ Matthew T. Houston
Matthew T. Houston
Special Superior Court Judge
for Complex Business Cases