Dipasquale v. Costas
| Decision Date | 05 March 2010 |
| Docket Number | No. 23436.,23436. |
| Citation | 2010 Ohio 832,186 Ohio App.3d 121,926 N.E.2d 682 |
| Parties | DiPASQUALE et al., Appellees and Cross-Appellants,v.COSTAS et al., Appellants and Cross-Appellees. |
| Court | Ohio Court of Appeals |
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Bricker & Eckler L.L.P., Mark R. Chilson, and Vladimir P. Belo, Columbus, for appellees and cross-appellants.
Matre, Matre & Beyke Co., L.P.A., Kerrie K. Matre, and James A. Matre, Cincinnati, for appellants and cross-appellees.
{¶ 1} Defendants-appellants, James Costas, D.D.S., Connie G. Hendricksen Trust, Robert Hendricksen, D.D.S., and South Centerville Dental Condominium Association, appeal from a judgment of the trial court declaring, after a bench trial, that plaintiffs-appellees Toni and Charles DiPasquale, D.D.S., are entitled to construct additions to their condominium unit. The DiPasquales have also filed a cross-appeal, challenging the trial court's failure to provide an evidentiary hearing to determine the specific amount of costs and attorney fees awarded as discovery sanctions against defendants-appellants.1
{¶ 2} Defendants contend that the trial court abused its discretion in determining that the proposed additions would not cause any damage to condominium property and in ordering an amendment to the declaration expanding the DiPasquale unit and decreasing common-element property percentages of the remaining owners. Defendants further contend that the trial court abused its discretion in concluding that the directors of the South Centerville Dental Condominium Association (“SCDCA”) were not properly appointed or elected and that all actions taken by the directors are null and void. In addition, defendants contend that the trial court abused its discretion in determining that they breached fiduciary duties as partners, Ohio not-for-profit corporation members directors, and officers. Finally, defendants contend that the trial court abused its discretion in denying recovery on their counterclaims.
{¶ 3} We conclude that the trial court did not err in concluding that the plaintiffs are entitled to construct improvements on their property. The trial court appropriately considered the requirements of the Condominium Act in the context of the parties' multiple roles as partners, co-owners and co-declarants, members and officers of the condominium association, and unit owners. We further conclude that competent and credible evidence supports the trial court's imposition of duties of good faith and fair dealing upon defendants in their roles as partners and directors of a nonprofit corporation. Competent and credible evidence also supports the trial court's conclusion that the directors of the SCDCA were not properly appointed. In addition, we conclude that the trial court did not err in rejecting the defendants' counterclaims, because competent and credible evidence in the record supports the court's findings. Finally, we conclude that the trial court did err in failing to hold a hearing on the amount of attorney fees and costs to be awarded for defendants' discovery violations.
{¶ 4} Accordingly, the judgment of the trial court is affirmed in part and reversed only with respect to the amount of attorney fees and costs awarded with respect to the plaintiffs' motion to compel discovery. This cause is remanded for further proceedings consistent with this opinion.
{¶ 5} This case arises from a bitter dispute among two dentists and an oral surgeon who had peaceably co-owned real property for many years. The building that is the subject of the dispute was built in 1973 and contains three office suites: 9346, 9348, and 9350 Dayton-Lebanon Pike. Defendant James Costas is a dentist and occupied the middle suite, which is 9348. Dr. Costas purchased an undivided one-third interest in the premises in 1974. In the same year, Charles DiPasquale rented the rear suite, 9346, which was just a shell. DiPasquale built the entire suite himself and rented it from 1974 until 1985, when he purchased a one-third undivided interest in the entire premises. Robert Hendricksen is an oral surgeon who has occupied the front suite, 9350, since around 1982. An undivided one-third interest in the premises was deeded to Dr. Hendricksen's wife, Connie, in 1985.
{¶ 6} All three doctors testified that they had conducted the property affairs as a partnership since around 1984 and that the partnership was never dissolved.2 The dentists each paid equally into a dental building fund, which was used to pay for things like water, trash, snow removal, parking lot repairs, real estate taxes, and so forth, with many decisions being made as the result of “driveway talk.” At one point, Dr. DiPasquale conducted the financial affairs of the building fund and had signing authority on the fund. There were also patient referrals back and forth, and the dentists helped each other out.
{¶ 7} The dentists also consulted with respect to improvements or additions made to the property. In 1987, Dr. Costas and Dr. Dipasquale divided and walled in a breezeway between their offices to afford more usable space for each office. Dr. DiPasquale paid for all the changes that he added.
{¶ 8} An additional expansion occurred when the parking lot was expanded to the east of the existing parking lot, at Dr. Costas's suggestion. Dr. DiPasquale obtained contractors, and all three dentists contributed to the expanse. Subsequently, in November 1997, Dr. DiPasquale added an expansion to the east side of his building for a business office. He also incorporated the front of the office area for a concrete pad and handicap access, because there was none. This expansion cost approximately $80,000, and the other two doctors did not contribute. No one objected to this expansion, and no written consents were obtained.
{¶ 9} In March 2000, Dr. DiPasquale needed a surgical suite because he was treating more patients who needed to be sedated and bigger and more cosmetic cases. Another treatment room was added, and a concrete pad was added next to Dr. DiPasquale's office, where patients could wait for buses. Dr. DiPasquale also added a concrete pad on the west side of his office and placed a picnic table there where staff could eat lunch. The cost of these improvements was about $80,000, and neither Dr. Hendricksen nor Dr. Costas paid for any part, including the concrete pads. No objections were expressed to this expansion, and no written consent was obtained. Dr. DiPasquale indicated that he had spent $30,000 to $40,000 just for concrete and between $700,000 and $900,000 in basic revisions. The other doctors did not share in these expenses.
{¶ 10} Before and after the addition was complete, Dr. Hendricksen came to Dr. DiPasquale's office, administered sedation to Dr. DiPasquale's patients, and collected fees for that. Furthermore, unlike the other two offices, Dr. DiPasquale's did not have a concrete walkway or a protective overhang for the entrance.
{¶ 11} During the 1990's, the idea of a condominium was briefly investigated. Dr. DiPasquale consulted an attorney, with the approval of the other partners, but nothing transpired. Subsequently, in late June 2006, Dr. Hendricksen's daughter, Amy, asked attorney Hans Soltau to do some work on a condominium. Soltau never met with either Dr. DiPasquale or Dr. Hendricksen, but may have met with Dr. Costas. Soltau prepared articles for an Ohio not-for-profit corporation, bylaws, and condominium declarations, but never met with the dentists to review the documents or to discuss condominium law. The dentists and their wives signed the condominium documents in October and November 2006. At the time, Connie Hendricksen owned her husband's unit, and her interest was deeded to the Connie Hendricksen trust. Dr. DiPasquale deeded the condominium property to his wife, Toni DiPasquale, and retained a survivorship interest. During the course of subsequent litigation, Dr. Dipasquale was added back to the deed, with both spouses retaining a survivorship interest. Soltau failed to file any deeds transferring any ownership interests in the property with the Montgomery County Recorder until June 20, 2007.
{¶ 12} The articles of incorporation were signed only by Dr. Costas. Soltau also failed to file the articles with the state of Ohio until after he learned that a lawsuit had been filed in February 2008, disputing the existence of the condominium association. During the meantime, the three dentists had continued operating as partners and conducted matters in the way they always had. No meetings of the SCDCA were held, no board members were elected, no records were kept, no budget was prepared, and no architectural review committee was formed.
{¶ 13} Dr. Robbins is another dentist who had rented the middle unit from Dr. Costas for many years prior to the formation of the SCDCA. In July 2007, Dr. Robbins painted the exterior of Dr. Costa's and Dr. Hendricksen's units without receiving approval of the condominium association or from a board of directors. Surveillance cameras were also placed in exterior areas without consent, and planters were installed in Robbins's area without prior approval. Dr. Robbins offered to paint the exterior of Dr. DiPasquale's unit, also, but Dr. DiPasquale said that would not be necessary, because he was probably going to be adding on to the unit.
{¶ 14} In May 2007, the Costases and Dr. DiPasquale had argued about a construction trailer that was parked in the parking lot. Subsequently, in June 2007, Dr. Costas signed a new signature card with Liberty Bank, superseding the prior card of 1999. Dr. Costas indicated on the signature card that he was the sole owner of the dental building fund, and gave signing authority to himself and Dr. Hendricksen's daughter, Amy.
{¶ 15} In the summer of 2007, Dr. DiPasquale discussed expansion plans with Dr. Costas. Dr. DiPasquale...
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