Greenbriar Condo. v. Brooks

• Decision Date: 22 June 2005
• Docket Number: No. 126,126
• Citation: 387 Md. 683,878 A.2d 528
• Parties: GREENBRIAR CONDOMINIUM, PHASE I COUNCIL OF UNIT OWNERS, INC. v. Clifford A. BROOKS.
• Court: Maryland Court of Appeals

878 A.2d 528

387 Md. 683

GREENBRIAR CONDOMINIUM, PHASE I COUNCIL OF UNIT OWNERS, INC. v. Clifford A. BROOKS.

No. 126, September Term, 2004.

Court of Appeals of Maryland.

June 22, 2005.

Reconsideration Denied August 8, 2005.

Frank J. Emig (Law Offices of Frank J. Emig, Greenbelt), on brief, for petitioner.

Clifford A. Brooke, Greenbelt, for respondent.

Argued before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA and JOHN C. ELDRIDGE (Retired, Specially Assigned), JJ.

CATHELL, J.

This case addresses the foreclosure of liens upon a condominium unit precipitated by more than fifty unpaid condominium assessment installments.¹ In this case, involving an appeal of the second sale at foreclosure, each of which was set aside by the Circuit Court for Prince George's County, we must determine not only the point at which an objector to a foreclosure sale based upon the lien arising from a default in the payment of a condominium fee or assessment must formally make known his objections to the court and to the creditor(s), but also the effect, if any, of a creditor's statement of debt on the debtor's exercise of his right of redemption.

Following the second foreclosure sale which occurred on January 15, 1999, Clifford A. Brooks ("Mr. Brooks"), respondent, filed exceptions to the sale and its audit in the Circuit Court for Prince George's County. Greenbriar Condominium, Phase I, Council of Unit Owners, Inc. ("Council"), petitioner as well as the lien holder and successful foreclosure bidder, sought to enforce the sale so as to collect on the condominium assessment indebtedness based upon numerous defaults in the payment of installments owed by respondent. After the Circuit Court invalidated the sale, petitioner appealed to the Court of Special Appeals which affirmed the lower court's invalidation of the foreclosure sale, but vacated the Circuit Court's award of attorney's fees to respondent, an attorney appearing on his own behalf.

The parties filed cross-petitions for writ of certiorari, and we granted Council's petition, but denied Mr. Brooks' petition,² on January 12, 2005. Greenbriar Condominium, Phase I Council of Unit Owners, Inc. v. Brooks, 384 Md. 581, 865 A.2d 589 (2005).

For purposes of clarity, we have restructured the questions presented for our review:

1. When a debtor makes a tender which the creditor rejects as insufficient, does a creditor's counter with a statement of debt in excess of the debtor's tender prejudice the debtor or constitute a denial of the debtor's right to redeem his property so as to permit a mortgage foreclosure sale to be set aside?

2. May a mortgage foreclosure sale be set aside because of the lien holder's submission of an incorrect statement of the debt owed even though it is uncontroverted that a default had resulted in a lien in some amount?

3. At what point must the debtor formally file his objections to the holding of a foreclosure sale?

We hold that prior to the sale, the debtor may seek to enjoin the foreclosure sale from proceeding by filing a motion to enjoin as provided in Maryland Rule 14-209. Should a sale occur, however, the debtor's later filing of exceptions to the sale may challenge only procedural irregularities at the sale or the debtor may challenge the statement of indebtedness by filing exceptions to the auditor's statement of account.³

I. Facts

It is of no surprise that the series of liens and foreclosure actions in this case that has endured some ten years, has also generated a voluminous record and an extensive set of facts.

We begin with the relevant background in respect to the ownership interest of respondent, Clifford A. Brooks, who in June 1975 purchased for his residential use a condominium⁴ in the 253-unit, four phase, Greenbriar Condominium Development and specifically, in Greenbriar Condominium — Phase I located at 7722 Hanover Parkway, Greenbelt, Maryland. As a Greenbriar Condominium — Phase I owner, Mr. Brooks was designated as a member of the "Council of Owners" and, along with all other present and future owners, mortgagees, lessees and occupants, was subject to the by-laws as well as to the provisions of the relevant Declaration of Covenants, Conditions and Restrictions of both the Greenbriar Condominium Association ("GCA") and the Greenbriar Condominium, Phase I.⁵ The condominium's developer recorded an original Condominium Declaration in November 1974, which was subsequently amended in December 1974. The by-laws were originally recorded in November 1974 and, since that time, have been periodically modified or amended as provided therein. The Phase I by-laws and the declarations are administered by that phase's Board of Directors, Greenbriar Condominium, Phase I Council of Unit Owners, Inc.,⁶ and the condominium is managed by its agent, Condominium Venture, Inc., with offices at 7600 Hanover Parkway, Greenbelt, Maryland.

Found within the declarations and by-laws are provisions bestowing authority to levy upon each condominium unit owner an annual assessment payable in monthly installments. In June 1991, Council's Board of Directors adopted a "Policy Resolution" which delineated the procedure for collection of delinquent assessments, stated that a reminder notice which included notice of acceleration of the assessments would be mailed on the seventh day of the month and specified that a $15.00 late fee would be imposed on fees not received by the fifteenth day of each month. The Resolution further indicated that a notice of intent to file a lien would be sent to the homeowner if the fee remained unpaid as of the twenty-second day of the month, and a lien would be filed thirty days after service on the owner of the intent to file the lien had been completed.⁷

The monthly assessments appear to have been $254 during the years of 1991 through 1993; the assessment amount was reduced to $239 monthly in 1994 and was further reduced to $229 monthly in 1995 and to $227 for each month of 1996. Apparently, according to amended by-law Article VII, Assessments, Section 3, Acceleration,⁸ the assessments may be accelerated as follows:

"Section 3. Acceleration. If a unit owner shall be in default in payment of an installment of an assessment, including, but not limited to, the monthly installments based on the annual budget, the Board of Directors may accelerate the remaining installments upon ten (10) days' written notice to such unit owner, whereupon the entire unpaid balance of such installments shall become due upon the date stated in such notice."

At least since the late 1980s, Mr. Brooks demonstrated habitual delinquency in making timely payment of each monthly assessment and, in most cases, he was charged a $15.00 late fee for each late payment.

In March 1989 Council recorded among the Land Records for Prince George's County, a Statement of Lien against Mr. Brooks claiming a lien of $3,054.00 in unpaid monthly installments of the annual condominium assessment for the period from December 1, 1988 to December 31, 1989, a period of eleven months of separate installment delinquencies. Upon Mr. Brooks' payment, Council released this lien in February 1990. Similarly, in September of 1992, Council recorded a lien in the amount of $1,524.00 in unpaid assessments and fees for the period from July 1, 1992 through December 31, 1992, a period of six months of delinquencies. Following Mr. Brooks' payment, Council recorded a "Release and Satisfaction of Statement of Lien" on July 8, 1994.

Once again, on April 22, 1994, Council filed a Statement of Condominium Lien among the Land Records of Prince George's County claiming a lien "amount of $2,929.80 for the period from Dec. 1, 1993 to December 31, 1994 [a period of eleven months of delinquencies] plus late fees, interest, collection costs, and attorney's fees" (alteration added). With the April 22, 1994, lien still unsatisfied as of July 1994, Council's Board of Directors resolved at a July 12, 1994, meeting, to institute foreclosure proceedings upon the lien it had filed in April 1994. Accordingly, on July 20, 1994, Council filed in the Circuit Court for Prince George's County, a "Line to Docket Foreclosure Action." The accompanying Statement of Indebtedness, tallied as of June 30, 1994, indicated the following debt amount:

"Actual and accelerated condominium assessment through 12/31/94 $ 2,929.80 --------------------------------------------------------- Late fees through 6/30/94 105.00 --------------------------------------------------------- Collection costs 155.00 --------------------------------------------------------- Legal-private process service 20.00 --------------------------------------------------------- Lien charges 41.20 --------------------------------------------------------- Title search 65.00 --------------------------------------------------------- Attorney's fees 75.00 _________________________________________________________ TOTAL $ 3,391.00" ---------------------------------------------------------

Council properly noticed Mr. Brooks of its intention to foreclose the condominium lien. The record indicates that Mr. Brooks did not file a response or a petition to enjoin in response to the notice of foreclosure. However, presumably having received payment, the Council recorded a release of this lien on June 8, 1995.

Council thereafter sent to Mr. Brooks another "Notice of Intent to File a Lien" dated January 5, 1995, stating an amount due of $1,577.50, and another notice dated February 23, 1995, stating an amount due of $1,841.50 plus an unspecified amount of attorney's fees.⁹ Council subsequently recorded another lien on March 29, 1995, in the amount of $2,748.00 for the period from January 1, 1995 through December 31, 1995, a period of twelve months of delinquencies, and also filed on that same date an Amended Statement of Indebtedness reflecting additional unpaid assessments and fees calculated through March 10, 1995, as follows:

"Actual...