821 S.E.2d 667
S.C.2018Background
- Ronnie and Jeanette Dennis bought property and equity membership in Callawassie Island Club (1999) and were later members of The Callawassie Island Members Club after a 2001 transfer of club assets.
- Governing documents include a Plan, Bylaws, and Rules (original 1994 versions and later amendments; 2008 Plan, 2009 Bylaws/Rules were in effect when the Dennises resigned in 2010).
- The 1994 Plan/Bylaws and the 2008 Plan contain language requiring a resigned equity member to continue paying dues, fees, and food/beverage minimums "until his or her equity membership is reissued."
- The Dennises resigned (2010) and stopped payments; the Members Club sued for unpaid dues, fees, and charges. The circuit court granted summary judgment for the Club; the court of appeals reversed on ambiguity and Nonprofit Corporation Act grounds and remanded for trial.
- The South Carolina Supreme Court granted certiorari, reversed the court of appeals, reinstated summary judgment for unpaid dues/charges, and remanded to the court of appeals to address other unresolved issues.
Issues
| Issue | Plaintiff's Argument (Dennises) | Defendant's Argument (Club) | Held |
|---|---|---|---|
| Whether governing documents are ambiguous as to liability for dues after resignation | Documents are ambiguous; reasonable interpretation limits liability to dues accrued before resignation (or at most a short period); parol evidence (oral promise of four‑month max) admissible | Documents (Plan/Bylaws/Rules) unambiguously require continued payment until membership is reissued | Documents are unambiguous: resigned members must pay all dues/fees until membership is reissued; summary judgment proper |
| Parol evidence of oral assurances limiting liability | Oral statements (membership coordinator) said liability capped at four months; admissible if contract ambiguous | Parol evidence barred because contract is unambiguous; extrinsic evidence cannot vary written terms | Parol evidence inadmissible here because the court finds the written documents unambiguous |
| Whether the membership provisions violate S.C. Nonprofit Corporation Act §33‑31‑620 | §33‑31‑620(a) allows resignation at any time; court of appeals: Act forbids continued liability for dues accruing after resignation | Club: §33‑31‑620(b) preserves obligations from "commitments made" before resignation; membership agreement was such a commitment | Majority: §33‑31‑620(b) covers commitments made at formation; continued post‑resignation liability is lawful when members contracted to that effect; Act not violated |
| Whether expulsion/suspension rules create ambiguity or limit liability | Suspension/expulsion provisions and inconsistent versions create ambiguity whether member faces only limited post‑resignation exposure | Termination/resignation provisions control; suspension/expulsion rules either irrelevant or discretionary and do not negate reissuance rule | No ambiguity: termination provisions subordinate to bylaws/plan; expulsion is discretionary and was not triggered here |
Key Cases Cited
- S.C. Dep't of Nat. Res. v. Town of McClellanville, 345 S.C. 617 (2001) (contract ambiguity is a question of law)
- Town of Summerville v. City of N. Charleston, 378 S.C. 107 (2008) (statutory interpretation is a question of law)
- Jordan v. Sec. Grp., Inc., 311 S.C. 227 (1993) (plain contract language controls; parol evidence rule)
- Gilliland v. Elmwood Props., 301 S.C. 295 (1990) (parol evidence rule prohibits extrinsic evidence that contradicts an unambiguous writing)
- Penton v. J.F. Cleckley & Co., 326 S.C. 275 (1997) (parol evidence admissible when contract is ambiguous)
- Cafe Assocs., Ltd. v. Gerngross, 305 S.C. 6 (1991) (ambiguous contract issues create factual questions for the factfinder)
- Ward v. W. Oil Co., 387 S.C. 268 (2010) (courts will refuse to enforce contract terms contrary to statutory law or public policy)
- White v. J.M. Brown Amusement Co., 360 S.C. 366 (2004) (contracts violating public policy are unenforceable)