A North Carolina court has ruled on a case involving a dispute between Spencer Creek, L.L.C. and the Linville Ridge Property Owners' Association, Inc. The case, Spencer Creek, L.L.C. v. Linville Ridge Prop. Owners' Ass'n, Inc., was filed in the North Carolina Business Court under docket number 25-CVS-1257. The court's decision addresses the legality of a $7,500 assessment levied on property owners following damage caused by Hurricane Helene in 2024.
The ruling is significant for property owners within the Linville Ridge Development in Avery County, North Carolina, as it clarifies the authority of the property owners' association to impose assessments and the requirements for such actions. The court's opinion may set important precedents regarding the enforcement of property owners' association bylaws and the rights of members within such associations.
Background
Spencer Creek, L.L.C. is a property owner within the Linville Ridge Development and is represented by Mark Farbman, who is also the sole officer of the company. The Linville Ridge Property Owners' Association (POA) is a nonprofit corporation that governs the community and is managed by a Board of Directors, with Ryan Duffy serving as the president.
The dispute arose after the POA announced a Repair Assessment of $7,500 per residence and $5,523.75 per vacant lot to fund repairs to common areas damaged by Hurricane Helene. Spencer Creek and Farbman challenged the assessment, claiming it was unlawfully levied without proper approval from the majority of Class A POA members, as required by the association's bylaws.
On November 10, 2025, the plaintiffs filed a putative class-action complaint against the POA and Duffy, alleging breach of bylaws, injunctive relief, violations of the North Carolina Debt Collection Act, and breach of fiduciary duty. The defendants responded with a motion to dismiss the case, arguing that the plaintiffs failed to state a claim and did not join necessary parties.
The Ruling
Judge Matthew T. Houston presided over the case and ruled on the defendants' motion to dismiss. The court granted the motion in part and denied it in part. Specifically, the court dismissed the plaintiffs' cause of action for breach of fiduciary duty, stating, "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."
The court also ruled that the plaintiffs' request for injunctive relief was not a standalone cause of action, emphasizing that "injunctions are remedies, not independent causes of action." However, the court did not dismiss the entire case and allowed other claims to proceed, indicating that the plaintiffs could still seek relief on the remaining issues.
Impact
This ruling has significant implications for property owners within the Linville Ridge community. It clarifies the standards and procedures that must be followed by the POA when imposing assessments on its members. The court's decision also highlights the importance of adhering to the bylaws of property owners' associations, which govern the rights and responsibilities of both the association and its members.
Additionally, the ruling may influence future cases involving property owners' associations in North Carolina, particularly regarding the enforcement of assessments and the fiduciary duties owed by board members to association members. The court's findings on the necessity of joining other property owners as parties to the action may also set a precedent for how similar disputes are handled in the future.
What's Next
The case is not over, as the plaintiffs can still pursue their remaining claims. The court's ruling leaves open the possibility for further legal action regarding the validity of the Repair Assessment and the responsibilities of the POA. It remains to be seen whether the defendants will appeal the decision or if any related cases will arise from this ruling.