A group of homeowners on Renegade Mountain has been declared the legitimate board of directors for the community following nearly a decade of legal wrangling and property disputes.
A meeting of the membership is to be held before Sept. 30, 2021, with back dues and current dues to be assessed and records updated.
The dispute between the two boards of directors at Renegade has been ongoing since 2011, with residents complaining of blocked roads, closure of amenities and shutting off street lights. The court decision settles the question of developer rights within the planned development community and the number of votes assigned to each member of the community club.
Senior Judge Robert E. Davies, in Cumberland County Chancery Court, ruled the developer rights had not been conveyed to new owners since the 1980s when then-owner Cumberland Gardens Limited Partnership defaulted on its loans.
That break in title and the lack of development or marketing at the property over the past 30-plus years means that Moy Toy, one of the two boards, did not have developer rights or the extra votes that comes with that distinction.
Davies cited a 2019 case from the Tennessee Court of Appeals, which found the Uniform Common Interest Ownership Act provided a timetable for developers to turn over control to a homeowners association:
•60 days after conveying three-fourths of units that may be created to unit owners
•Two years after ceasing to offer units for sale in the ordinary course of business
•Two years after any right to add new units was last exercised
•The day the declarant records a voluntary surrender of rights to control activities
“Since Moy Toy purchased the property in 2010, it has not sold a single lot, undertaken any construction, and has failed to market the property in any significant way,” Davies wrote.
Renegade Resort was first formed in 1972, with 555 building lots sold and about 9,000 acres of undeveloped land. The property at that time included a golf course, a lodge, and several roads that served the homes atop the mountain just outside Crab Orchard. The golf course has since been closed. Many of the amenities have fallen into disrepair, Davies added.
“Numerous members and residents testified that they or other members used the common properties in question; were promised the common properties in question to purchase their property; relied on those promises; and paid dues which in the past were used to improve and maintain these common properties,” he wrote.
Residents had an “easement of enjoyment” for the common areas, including the entrance area, guard shack, platted roads, sports park, pool and tennis courts.
“Moy Toy effectively negated the RMCC’s members’ easement of enjoyment by failing to maintain these common areas, thereby making them impossible to enjoy,” he wrote.
The order also turns over maintenance and control of several roads in the community to the board of property owners, including Renegade Mountain Pkwy., Great Warriors, Running Deer Rd., Mohawk Trail, and Running Deer from Applewood to the end of the Renegade property, along with a road from Renegade Mountain Pkwy. to Hickory Trail. The board will be tasked with correcting safety issues around the old lodge and must provide Moy Toy with proof of liability insurance of at least $500,000.
The court also reviewed legal costs borne by both boards and required funds paid with dues to be repaid. The homeowners board was told to repay $19,177.69, which was the amount spent on legal costs above the amount of voluntary donations received. John Moore with the owner board indicated this would be appealed.
The Moy Toy board spent $54,147 of dues assessments on legal fees during that time, which the court ruled they were not entitled to spend. The court also found the organization was not entitled to any credit for 2010 expenses for the property, since those expenses were paid by prior board, and a $20,000 loan between Moy Toy and the RMCC board was unenforceable.
The Moy Toy board was ordered to pay $31,000 and was assessed court costs in the legal matter.
Sales and Transfers
When Cumberland Gardens Limited Partnership defaulted on its loans, the property was foreclosed and transferred to Cumberland Gardens Acquisitions Corp., which took possession of the development in 1991. Attorney Joseph Looney testified in December this property transfer only included real property, not developer rights, and the company never developed the community after taking ownership.
Instead, Looney told the court, it worked to maintain the property so that it could sell it.
Cumberland Gardens Acquisition Corp. sold the property in 2000 to Renegade Resort LLC. The lawyer for that organization, Edward Hill, believed the agreement included development rights for the new owners, but none of the documents specified those rights were conveyed, the court said.
The group of owners included Phillip Guettler and Mike McClung who, in 2010, formed Moy Toy and purchased Renegade.
There have been recorded restrictions and property covenants for Renegade since the 1970s, updated in 1987.
In 2000, with a new owner, a meeting was called to review some proposed changes. Joe Matchak, who purchased property on Renegade in 1997, attended that meeting and kept a copy of the proposed revisions handed out at the time.
He testified that no vote was taken by the members in 2000. He had also kept a copy of the proposed changes.
Guettler, however, claimed he was elected a director at the 2000 meeting, and that written ballots for the proposed amendments were handed out at the door, though he then told the court the changes were approved with a voice vote and, later, by a show of hands.
No minutes of this meeting have ever been produced. Guettler claimed the minutes were destroyed when the lodge burned.
The court found his testimony to “not be credible,” the order states.
The proposed covenants were not recorded with the county’s register of deeds, either.
In 2005, new covenants for the property — allegedly those presented in 2000 — were recorded with the county followed by a second set of changes.
Neither matched the copy of proposed changes Matchak received in 2000.
The second set says attorney Looney prepared the documents, but he testified he was not involved in creating the document.
“Clearly, it was a ‘cut and paste job’ and a poor one at that. Who prepared these documents and who recorded them will never be known, nor can the court discern any purpose for their recording,” Davies wrote. He declared them “null and void” along with the first set of 2005 changes.
Renegade Resort LLC sold off portions of the Renegade property to various individuals from 2000 to 2005. LKM Group LLC bought and operated the community in 2005. An accountant testified LKM Group owned the homeowners association $261,000 in unpaid dues.
Moy Toy took over in 2010, but there was little communication sent to property owners. In fact, no owners were sent invoices for their 2011 dues payments.
McClung, Guettler and, later, Guettler’s son claimed to be the only board members for the Renegade Mountain Community Club from 2011 to 2016.
This board directed streetlights to be turned off and terminated guard service at the guardhouse. During the winter of 2010-’11, Moy Toy stopped clearing roads of snow and, in the spring, didn’t mow the common areas. When two culverts collapsed in 2011, Moy Toy paid for stone and materials, but residents provided labor to make repairs.
Resident John Moore began talking with neighbors in 2011 and they developed a list of complaints presented to McClung in April 2011. They sought access to financial documents that were part of filings with the Tennessee Secretary of State’s office. Representatives of Moy Toy did not respond.
Homeowners held a meeting in September 2011. Moy Toy objected to the meeting. McClung attended the meting, but claimed the only members in good standing at that time were himself and his family.
The court disagreed, finding 87 members in good standing were present in person or by proxy at the 2011 meeting. The reason no one paid dues in 2011, the court said, was because Moy Toy had not sent invoices. Further, the court also ruled the Moy Toy board had no authority to deny the request for a special meeting.
Moy Toy refused to turn over assets to the newly elected owner board. The owner board collected separate dues to pay for maintenance and road upkeep. This board also solicited donations for legal expenses, which have been ongoing these past 10 years. While kept in the same account, donations were paid with separate checks from dues payments and the court said Moore kept records on payments.
Lawsuits were filed, with each side asking the court to issue an injunction against the other board from acting on behalf of the community club. The case was initially heard in 2015-’16.
The court in that found the Moy Toy board was not elected by members but was instead self-appointed and that the homeowners acted in good faith in calling for their 2011 meeting, but neither board was determined to be legitimate.
The time to challenge the 2005 change in restrictions and by-laws had expired by the time legal action began, that court found. However, an alternate ruling said that if the statute of limitations did not bar this question in the suit, that the 2005 amended covenants and restrictions were invalid and the 1987 restrictions would be valid. The 2005 changes were never approved by the members of the community, the court said.
A special master was appointed to make an accounting of dues payments and hold a new election for board members. Moy Toy was allowed to cast 3,363 votes in that election because it was considered the “developer,” and the Moy Toy board was elected.
The homeowners appealed, with a ruling from the Court of Appeals issued in 2018. The appeals court ruled Moy Toy had not been allowed to present evidence on the 2005 restrictions or the issue of developer rights at the original hearing.
The court of appeals vacated the 2017 special election, saying a trial court must determine if Moy Toy had developer’s rights and the 10-to-1 vote ratio advantage it claimed.
The homeowners also appealed the ruling that Moy Toy could keep ownership of common areas and control unplatted roads.