Kurt M. Chambliss Et Al. v. Terry L. Rutledge Et Al.

The parties are all of the owners of four neighboring lots in a small, exclusive residential development. Each lot is subject to restrictive covenants. Kurt M. Chambless and Jill S. Chambless originally filed suit against Terry L. Rutledge and Cynthia L. Rutledge, averring that the Rutledges were violating the restrictive covenants. While the Chamblesses’ suit was pending, all of the lot owners (other than the Chamblesses) voted to amend the restrictive covenants. The Chamblesses amended their suit to seek a declaratory judgment invalidating the amended covenants and seeking a refund of certain monies they paid to Mr. Rutledge for the benefit of the homeowners’ association.1Each of the defendants filed a motion to dismiss the Chamblesses’ declaratory judgment claim due to their failure to state a claim upon which relief could be granted. The trial court granted the motions to dismiss, in part, and ruled that the amended covenants were valid and enforceable. The Chamblesses timely appealed to this Court. Upon careful review, we find that the trial court erred in granting the motions to dismiss for failure to state a claim after determining that the amended covenants are valid and enforceable. Accordingly, we vacate the trial court’s dismissal of those parts of the Amended Complaint challenging the validity of the amended covenants, and we affirm that portion of the trial court’s order declaring that the amended covenants are valid and enforceable. Further, we affirm the trial court’s dismissal of the declaratory judgment claim against the Maxwells and the Dotys arising out of Mr.Rutledge’s use of association funds but decline to award the Maxwells and the Dotys their attorneys’ fees on appeal.