Greenbriar v. Brooks

• Decision Date: 02 September 2004
• Docket Number: No. 1884,1884
• Citation: 859 A.2d 239,159 Md. App. 275
• Parties: GREENBRIAR CONDOMINIUM, PHASE I, COUNCIL OF UNIT OWNERS, INC. v. Clifford A. BROOKS.
• Court: Court of Special Appeals of Maryland

859 A.2d 239

159 Md. App. 275

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

No. 1884, Sept. Term, 2002.

Court of Special Appeals of Maryland.

September 2, 2004.

Reconsideration Denied November 8, 2004.

Frank J. Emig, Greenbelt, for Appellant.

Clifford A. Brooks, Greenbbelt, for Appellee.

Panel: KENNEY, DEBORAH S. EYLER, and SHARER, JJ.

KENNEY, Judge.

In this case, we are asked to consider issues of concern to both the growing number of people who live in common interest communities and to the governing authorities responsible for their operation. The fact that the parties are not strangers to this Court is unfortunate, but not surprising, as these cases often reflect an ongoing test of wills among the parties involved.

Involved are several entities and documents with similar names. Therefore, we begin by identifying the various entities and their governing documents. Greenbriar, a residential development located in Prince George's County, was developed in four phases. The overall community association, "GCA," has two governing documents that are pertinent to this appeal: the "GCA Declaration" and the "GCA By-Laws."¹ GCA is not a party in the case. Clifford A. Brooks, appellee, owns a condominium unit in Greenbriar Phase I. The appellant is Greenbriar Condominium, Phase I, Council of Unit Owners, Inc., which we shall refer to as "Council."² Council has its own governing documents that are pertinent to this appeal, which we will refer to as the "Council Declaration" and "Council By-Laws."

Council appeals an order from the Circuit Court for Prince George's County that, inter alia, invalidated the January 15, 1999 foreclosure of Brooks's condominium and granted Brooks reasonable attorneys' fees for his involvement in the foreclosure proceedings after December 17, 1997. Council presents two questions for our review:

1. Did the circuit court err in setting aside the January 15, 1999 foreclosure sale of Brooks's property?

2. Did the circuit court err in determining that Brooks was entitled to an award of attorneys' fees?

Brooks filed a cross-appeal, presenting three questions, which we have slightly reworded as follows:

1. Did the circuit court err in its assessment of the amount due for 1995 and 1996 liens by failing to take into account all payments made by Brooks?

2. Did the circuit court err in finding that Brooks was not entitled to attorneys' fees for records and amounts excluded by the court?

3. Did the circuit court err in not granting reasonable attorneys' fees to Brooks under Maryland Rule 2-424(e)?

Brooks also moved to dismiss the case, claiming that the Council's Notice of Appeal was not timely filed.

We hold that the circuit court did not err in setting aside the January 15, 1999 foreclosure sale, but for reasons set forth in the opinion, we shall remand for further proceedings. In addition, we find error in the circuit court's award of interest and attorneys' fees. As to the issues presented in Brooks's cross-appeal, we shall affirm the judgments of the circuit court.

FACTUAL AND PROCEDURAL HISTORY

This case began in 1994 when Council sought to foreclose on Brooks's condominium unit because Brooks had failed to pay his monthly condominium charges. That foreclosure and one subsequent were cancelled when Brooks paid Council the amount due before the respective foreclosure sales.

In February 1996, Council again initiated foreclosure proceedings when Brooks failed to pay his assessment for October, November, and December 1995. A statement of indebtedness for $3,745 was filed with the circuit court. Frank Emig, Council's current counsel, was appointed trustee for the sale of the condominium. On May 10, 1996, the condominium was sold to Council for $2,500, subject to a first deed of trust in the amount of $16,698.26. On July 3, 1996, Brooks filed exceptions to the foreclosure sale. After a hearing, the circuit court entered an order ratifying the sale. Brooks noted a timely appeal.

In an unpublished opinion, Clifford A. Brooks v. Greenbriar Condominium, Phase I Council of Unit Owners, Inc., No. 87, September Term, 1997, 118 Md.App. 711 (filed Dec 17, 1997), this Court vacated the order ratifying the sale and remanded to the circuit court for it to "determine whether [the sale price] `shocks the conscience of the court.'" Clifford A. Brooks v. Greenbriar Condominium, Phase I Council of Unit Owners, Inc., No. 87, slip op. at 12. On remand, the circuit court, on December 8, 1999, found that its conscience was indeed "shocked." Council was then free to readvertise and resell the condominium unit, which it proceeded to do. The events leading up to the present appeal begin at that point in time.³

On December 14, 1998, Brooks filed with the court a Suggestion of Satisfaction of Outstanding Liens, stating that he had "personally delivered by hand to [Emig] a cashier's check in the amount of $3,411.00 in full satisfaction" of the underlying liens. On December 22, 1998, Council filed a response indicating that $3,411 was insufficient to satisfy the lien, and returned the check to Brooks. In response, Brooks sent a letter to Council, in care of Emig, asking for the exact amount owed. One week later, on December 29, 2002, Brooks reviewed the audit and calculated that he owed an additional $162.89. Brooks went to the bank and got a bank check in that amount to send to Council. On that same day, Council filed a supplemental statement of indebtedness, indicating that Brooks now owed $31,114.64 to satisfy the lien.⁴ In light of Council's supplemental statement, Brooks deemed it "fruitless" to send the additional $162.89 check.

At the foreclosure sale on January 15, 1999, Council again purchased the condominium unit. The purchase price was for $21,600, subject to the existing deed of trust on which $13,092.77 was owed. After the sale was conducted, but that same morning, Brooks filed an emergency motion for a temporary restraining order and for preliminary injunction; four days later, he filed an emergency motion for appropriate relief. Council filed oppositions to Brooks's motions. On January 19, 1999, Brooks deposited $3,411 in the court's registry. On March 5, 1999, Council filed its suggested final deficiency accounting for $11,445.62. On March 25, 1999, the circuit court filed a notice that the foreclosure would be ratified and confirmed on April 26, 1999. Brooks filed timely exceptions.

The Auditor's Report, filed on May 14, 1999, indicated that $8,660.46 was due; both Council and Brooks filed exceptions. On May 27, 1999, the circuit court, after a hearing on the exceptions, invalidated the sale. It found that Brooks had lawfully attempted to redeem the property when it tendered $3,411 to Council. The court also heard argument on whether Brooks owed any additional amounts and what should be the appropriate interest rate on the liens. Council argued that interest accrued at 18% based on the Maryland Condominium Act as stated in Council's Bylaws. Brooks countered that only 6% interest was due based on the GCA Declaration. The court agreed with Brooks, saying, "You give him the $3,411, plus the six percent as of May 10, 1996, and I'll dismiss the foreclosure." Because Brooks had already deposited $3,411 with the court's registry, only the interest was outstanding. On June 4, 1999, Brooks filed a Motion for Attorneys' Fees and Costs based on the GCA Declaration that provided that the "prevailing party shall be entitled to recover the costs of the proceedings, and such reasonable attorneys' fees as may be determined by the court." On June 17, 1999, Council filed an opposition to Brooks's motion for attorneys' fees. On that same day, Council filed another set of exceptions to the Auditor's Report of May 14, 1999, and a Motion to Reconsider the circuit court's ruling of May 27, 1999.

On July 6, 1999, the circuit court held a hearing concerning Council's motion to reconsider and Brooks's motion for attorneys' fees. Council argued that the May 27, 1999 ruling that only 6% interest was due on the outstanding lien amount was erroneous. It contended that Brooks's reliance on the GCA Declaration was misplaced because GCA did not institute suit against Brooks. Rather, the lien was established and foreclosed upon by Greenbriar Condominium Phase I, Council of Unit Owners, Inc., and, therefore, Council's, not GCA's, governing documents applied. Council's By-Laws state the "maximum amount permitted by law ... as permitted by Section 11-110(e) of the [Maryland Condominium] Act," which provides for an interest rate of 18%. The court denied the motion to reconsider.

In support of his motion for attorneys' fees, Brooks argued that the GCA Declaration is the only one his deed is subject to, and its provision for the recovery of attorneys' fees should be applicable. "[Council] has a declaration for a plan of condominiums, but there is only one declaration of covenants, and that is the [GCA] declaration." Council responded that it, not the GCA, was the party to the suit.

In reaching its decision, the circuit court found it important that every phase in Greenbriar pays fees to the GCA, and that, in fact, a portion of the amount for which Council was suing was for the benefit of GCA. "So [the GCA is] part and parcel of this suit, whether [it is] named or not. The funds are for the benefit of this." Thus, the court concluded that Council's effort to distinguish itself from the overall community association entity, was without merit:

I think this is a distinction without a difference, sir. Because you can't tell me any time when that other organization has ever filed a lien or brought a suit, and if it says that it grants attorney fees when the other side prevails, and the other side prevails in a suit brought about by the parent organization, which collects for that organization, for those funds, and then you are going to tell me that the other side, for that portion of the

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